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10-year bond yield can move close to 7.50%; market pricing in series of rate hikes: Economists

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10-year bond yield can move close to 7.50%; market pricing in series of rate hikes: Economists

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CNBC-TV18’s Latha Venkatesh spoke to Sajjid Chinoy, Chief India Economist at JPMorgan, and Abhishek Upadhyay, Senior Economist at ICICI Securities Primary Dealership, to discuss where the 10-year yields will go from here and if they will be high enough to slow down growth.

The 10-year bond yield is likely to move close to 7.50 percent, said Abhishek Upadhyay, Senior Economist at ICICI Securities Primary Dealership. Upadhyay's comment came after yield on the 10-year benchmark paper went up to 7.18 percent.

“Swap market was pricing in a series of rate hikes over the next two years, and to infer how much bond market was pricing, is difficult. Our sense is the 10-year yield can go to closer to 7.50 percent; the new trading rain may be between 7.25 percent and 7.50 percent in the current quarter,," said Upadhyay in an interview with CNBC-TV18.
According to Sajjid Chinoy, Chief India Economist at JPMorgan, "125 basis point hike per meeting over the next four to six meetings is probably what the doctors call for".
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The RBI's Monetary Policy Committee (MPC) decided to keep the repo rate unchanged in its first bi-monthly policy meeting of FY23, Governor Shaktikanta Das said on Friday. This is the 11th time in a row that the central bank has maintained a status quo on the key policy rate.
With no change this time as well, the repo rate currently stands at 4 percent. The reverse repo rate has been maintained at 3.35 percent.
Stating RBI’s agenda for this year, Das said that the central bank, after three years, has prioritised inflation control over growth taking note of inflation risks amid current international instability due to Ukraine-Russia war.
For full interview, watch accompanying video
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