# Rate Cut Cycle Near Turning Point

> RBI's rate hike expected as Indian bond yields surge amid inflation fears.
- Title: Rate Cut Cycle Near Turning Point · The Economic Times
- Summary: RBI's rate hike expected as Indian bond yields surge amid inflation fears. RBI likely to start monetary tightening in October after stronger-than-expected…
- Keywords: rbi, monetary tightening, indian bonds, inflation, bond yields, us treasury yields, crude oil prices, indian rupee, corporate borrowing costs, indian stock market, money, business
- Source: The Economic Times — https://economictimes.indiatimes.com/markets/stocks/news/rate-cut-cycle-near-turning-point-what-lies-ahead-for-indian-bonds/articleshow/134671117.cms
- Author: ET CONTRIBUTORS
- Published: 2026-10-04T07:07:00+00:00
- Read time: 1 min
- Topics: rbi, monetary tightening, indian bonds, inflation, bond yields, us treasury yields, crude oil prices, indian rupee, corporate borrowing costs, indian stock market, money, business
## RBI tightens monetary policy
The RBI is widely expected to kick-start a tightening cycle in the October MPC meeting.
## Elevated bond yields signal inflation risks
Benchmark 10-year bond yield closed at 7.1194% on September 25, a four-month high.
## US Treasury yields rise
The US 10-year Treasury yield climbed to an intraday high of 5.20% on September 24.
## Crude oil prices surge
Brent crude price crossed the $100-a-barrel level due to escalating West Asia conflicts.
## Retail inflation rises
Retail inflation in August hit 4.82%, prompting market rate hike expectations.
## RBI mops up liquidity
The RBI has mopped up excess liquidity through Open Market Operations (OMO).
## Monetary tightening impacts
Higher bond yields will increase refinancing costs for government and corporate debt.
## Rupee may strengthen
Monetary tightening could support the rupee by attracting foreign capital into government securities.
## Key takeaway

RBI likely to start monetary tightening in October after stronger-than-expected growth and inflation risks.