FED Hawkishness Drives Bond Yields Higher Amid MSME Lending Push
What happened
Higher-than-expected US inflation data and hawkish remarks from the Federal Reserve pushed global bond yields higher, fueling expectations of a rate hike in December. Despite this pressure, some banks are concentrating on MSME lending, with one institution noted for its strong emphasis on retail, agriculture, and MSME lending. Indian equities closed higher, driven by foreign institutional buying and better-than-expected quarterly earnings from Nifty 50 companies.
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Why it matters
The hawkish stance from the Federal Reserve increases the cost of capital globally by pushing bond yields higher. This contrasts with the strategy of certain banks to shift lending toward higher-yield segments, such as MSME and retail, to support credit growth and margin expansion.
From livemint.com
Who's involved
- FEDIssued hawkish remarks that pushed global bond yields higher
- bankIs concentrating on MSME lending and shifting to higher-yield segments
- Federal Open Market CommitteeThe policy-setting committee responsible for the Federal Reserve's monetary policy
Who could feel it
Possible knock-on effectsThese are possibilities Brind reasoned out, not predictions, and not advice. Most are not stated in any report.
- Federal Open Market CommitteeSpeculative
The hawkish policy might increase the cost of capital for businesses and consumers.