Black Friday

It's Thanksgiving but D-Street has no reason to be in festive spirits this holiday season. The latest GDP numbers for the September quarter show that the economy is not in the pink of it's health. Q2 GDP growth slid to a more than six year low of 4.5% and there are no signs of bottoming out yet.  Market veterans are looking at another round of  Interest rate cuts and Quantitative Easing by the RBI at it's Monetary Policy Review meeting on 5th December. The danger here is that retail inflation has been inching upwards with the October CPI numbers at 4.62%, a 16 month high on the back of high vegetable prices . Many economists have warned about the ills of stagflation - a term which denotes periods of high inflation coupled with high unemployment and stagnant demand in a country's economy. Transmission of interest rate cuts remain slow. Since January 2019, the RBI has slashed rates by 135 basis points while the fall in MCLR rates of banks has been only 40 basis points. C