30 Jul, 2013

US Treasury chart and its implications for India

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US Treasury 10 year rate on July 29, 2013 closed at 2.61%. It is near a 50 year low.

There are concerns in many circles, that the US interest rate cycle is reversing. By Dec 2014, expectations are between 4-5% in worst case scenarios. Esp. so if US industry picks up.

This means capital should flow out of riskier locations to a safe haven assets which are giving decent returns.

For India, in such a case we should expect rates to remain hard.

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