Policymakers, according to the report, must control inflation without harming the economy or financial markets
According to a report from the State Bank of India, with the prospect of a global slowdown, central banks in various countries may unwind rates as inflation cools and the slowdown begins to bite (SBI).
According to the report, policymakers must control inflation without harming the economy or financial markets.
With the prospect of a global slowdown, central banks in various countries may unwind rates as inflation cools and the slowdown begins to bite, according to a State Bank of India report (SBI).
Policymakers, according to the report, must keep inflation under control without harming the economy or financial markets.
“In fact, this is in stark contrast to the post-global financial crisis period in 2008, when all central banks cut rates simultaneously, but central banks in respective countries decided to exit from easy monetary policy separately, including India,” the SBI said.
According to the report, as the economic cycle slows, equity and bond prices will become less correlated.
When both bond and equity prices fall at the same time, investors face additional challenges.
Allocation to fixed income has been difficult this year due to the low yield on government bonds, which reduces its ability to offset losses incurred by investors during bear markets.
To fairly value stocks, equity markets consider news, whether positive or negative. According to the report, investors choose asset allocation in equity markets by comparing yields from short and long duration government securities.
While the Indian equity markets were volatile in 2022, a closer look at the data shows that they had the best performance on a relative scale in terms of returns and volatility, according to the SBI.
