Markets Rally After Fed Cuts Rates And Buys Treasuries
P&C | Thursday, 11 Dec. 2025
Washington D.C. | Planet & Commerce
The United States Federal Reserve has delivered its third interest rate cut of the year, slashing the federal funds rate by 25 basis points and bringing the target range down to 3.5 percent–3.75 percent. The decision, announced Wednesday, marks a subtle yet decisive shift toward what analysts are calling “stealth easing,” as the central bank not only reduces borrowing costs but simultaneously reactivates Treasury purchases to inject liquidity into financial markets. The move triggered a sharp rally on Wall Street, with investors interpreting the dual actions as confirmation that Chair Jerome Powell is now committed to preventing economic softening while containing the inflationary risks posed by tariffs and global instability. The vote inside the Federal Open Market Committee (FOMC) was deeply divided — a rare sign of internal tension not seen since the early inflation battles of 2022. The rate decision passed 9–3. Chicago Fed President Austan Goolsbee and Kansas City Fed President Jeffrey Schmid voted against further easing, arguing that cuts had gone far enough and could exacerbate inflation. At the other end of the spectrum, Governor Stephen Miran called for a more aggressive half-percentage-point reduction, warning that a weakened labor market needed stronger support. Powell acknowledged the split, calling the decision a “close call” and noting that he could “make a case for either side,” signalling just how uncertain the current economic trajectory remains.
However, the most consequential piece of Wednesday’s announcement was not the rate cut itself but Powell’s decision to resume Treasury purchases — a move reminiscent of pandemic-era liquidity support, though the Fed refuses to classify it as quantitative easing. The central bank will purchase USD 40 billion in Treasury bills on Friday and expects to sustain elevated buying for “a few months” before tapering. This, analysts say, is where the stealth easing truly begins. By putting downward pressure on short-term yields, the Fed effectively loosens financial conditions even while maintaining only modest rate cuts. David Russell, global head of market strategy at TradeStation, said Powell “threaded the needle” by offering markets liquidity through Treasury buys while keeping the Fed’s long-term rate outlook relatively tight. The so-called dot plot reflects only limited cuts penciled in for next year, an attempt to temper market expectations and keep inflation expectations anchored. Powell’s careful balancing act illustrates the Fed’s dilemma: tariffs imposed earlier this year have pushed inflation slightly higher, but global uncertainty — from Middle East missile exchanges to unresolved U.S. trade deadlines — threatens to weaken growth. During the post-decision press conference, Powell fielded questions on how the Fed’s forecasts should be interpreted. He explained that projections assume inflation may rise temporarily due to tariff effects but gradually return to target. Yet he emphasized that policymakers “cannot assume” inflation will fall smoothly, pointing to uncertainties surrounding supply chains, tariff magnitudes, and geopolitical disruptions. Powell stressed that the Fed must ensure a temporary price spike does not evolve into a broader inflation problem, underscoring the central bank’s continued vigilance.
When asked whether tariffs were driving the Fed to adopt a slower long-term rate path, Powell noted that the near-term economic changes — slightly slower growth, a small uptick in unemployment, and a three-tenths rise in inflation — had influenced the committee’s calculus. He also acknowledged that tariff uncertainty peaked in April but has since moderated, though it remains elevated. Despite global instability, including missile exchanges between Middle Eastern adversaries and unresolved trade disputes, Powell said uncertainty about the economic outlook had “diminished but remains elevated,” a phrase borrowed from the Fed’s Teal Book. Another focus of the briefing was the labor market. Analysts have raised concerns about weakening job creation, soft hiring outside a few sectors and weakness in the housing market. Powell downplayed immediate risks, noting the unemployment rate of 4.2 percent, solid wage growth and stable labor force participation. Housing, he admitted, remains a “longer-run problem” due to structural shortages and the burden of high mortgage rates. But he insisted the Fed’s best contribution to the housing sector is restoring price stability and maintaining a resilient labor market. The chair also acknowledged the possibility that tariffs could produce demand destruction — a scenario in which higher prices slow consumer spending enough to reduce inflationary pressure. Powell said the Fed is watching this dynamic closely but declined to assign probabilities. He stressed that the committee would need “months of cool inflation” to confirm that tariffs were dampening economic activity enough to materially shift inflation trajectories.
Powell repeatedly emphasized the importance of staying “well positioned to respond” as new data arise. With inflation cooling but not defeated, employment steady but uneven and global uncertainty still clouding forecasts, Powell argued that holding rates modestly restrictive while adding liquidity was the most prudent approach. The central bank’s posture, he said, provides room to pivot quickly if a sharper economic slowdown emerges while preventing premature easing that could fuel inflation. Financial markets reacted swiftly. Treasury yields fell as investors priced in the impact of renewed bill purchases. Stocks rallied, interpreting the dual policy tools as a sign that the Fed is prepared to cushion the economy against shocks without abandoning its inflation-control mandate. Market strategists said Powell’s remarks reassured investors that the Fed will not return to rate hikes, effectively ruling out further tightening as long as inflation expectations remain anchored.
Economists noted that Wednesday’s package — rate cuts paired with balance-sheet expansion — represents the clearest indication yet that “stealth easing” is underway. The Fed may not use the language of quantitative easing, but liquidity injections coupled with a patient rate stance amount to the same functional outcome: loosening financial conditions while avoiding the political optics of a major dovish pivot. The coming months will test the Fed’s ability to navigate contradictory pressures — rising tariffs, fragile supply chains, global risks, slowing housing markets, and the still-resilient American consumer. But Powell’s message was consistent: policy must adapt in real time, inflation expectations must remain anchored and the Fed stands ready to shift course if the economy shows signs of stress. For now, markets have interpreted Wednesday’s decisions as a signal of confidence: the era of stealth easing has begun, and the Fed intends to manage the path forward with precision.
RBI Eases Cash Credit Rules And Current Account Norms
P&C | Thursday, 11 Dec. 2025
New Delhi | Planet & Commerce
The Reserve Bank of India on Thursday announced a significant relaxation of its transaction account framework, removing all restrictions on banks opening and maintaining cash credit accounts and easing long-standing norms governing current and overdraft accounts. The move, unveiled in the central bank’s updated transaction account guidelines, marks a major shift in India’s banking regulation landscape and is expected to provide greater operational flexibility to both lenders and borrowers, particularly small and medium businesses that rely heavily on cash credit and current account facilities for daily financial operations. In its statement, the RBI said a cash credit account is “operationally different” from current accounts and overdraft accounts, and therefore should not be bound by the same limitations that previously restricted banks from offering such facilities freely. The central bank has now allowed banks to open, maintain and operate cash credit accounts based entirely on customer needs, removing all prior constraints that governed how these accounts could be structured or allocated across multiple banks. The reforms follow extensive industry feedback received after the RBI released draft rules on October 1, 2025, prompting the regulator to refine and liberalise its approach in response to concerns raised by borrowers, banks and business associations. Cash credit facilities are a lifeline for Indian enterprises, serving as flexible short-term working capital loans that allow businesses to withdraw funds as needed, repay when cash flows improve and operate within sanctioned limits. By removing restrictions around these accounts, the RBI aims to streamline credit access and reduce the administrative hurdles that often slowed working capital allocation across sectors. The decision is being interpreted as a strong pro-growth signal at a time when businesses are navigating global volatility, supply chain disruptions and fluctuating input costs.
Alongside cash credit liberalisation, the RBI also eased norms for maintaining current and overdraft accounts. Under the revised framework, banks may now freely maintain current accounts for customers whose total banking exposure is below ₹100 million. This change marks a departure from earlier rules that limited the number of banks a borrower could maintain accounts with, prompting companies to restructure existing arrangements and occasionally causing operational disruptions. With the new norms, businesses with exposures under ₹100 million will enjoy complete flexibility to choose their banking partners without restriction. For borrowers with exposures exceeding ₹100 million, the RBI has introduced a new threshold structure. Banks that hold at least 10 percent of a borrower’s total exposure may now offer current and overdraft account facilities without seeking additional approvals or coordinating with consortium banks. This represents a meaningful reduction in compliance friction, particularly for large corporations operating with multiple lenders under consortium or multiple banking arrangements. The objective is to allow operational accounts to be housed with banks that maintain substantial exposure to the borrower, ensuring risk alignment while also reducing procedural delays.
Current accounts are vital for organisations with high transaction volumes, including retail chains, exporters, importers, service companies and infrastructure businesses. They allow unrestricted deposits and withdrawals, facilitate day-to-day working capital transactions and support business continuity. Overdraft accounts, similarly, provide temporary credit flexibility that helps businesses manage cash flow mismatches. By treating current, overdraft and cash credit accounts collectively as “transaction accounts,” the RBI has clarified the regulatory structure while modernising access norms to suit today’s banking environment. The reforms are expected to strengthen the ease of doing business, reduce unnecessary compliance burdens and enhance liquidity management for enterprises across India. Bank executives have welcomed the move, describing it as a rationalisation of overly restrictive norms that were introduced in earlier years to curb misuse of multiple accounts but inadvertently created bottlenecks for legitimate business operations. The earlier framework required borrowers with large exposures to route all transactions through designated banks based on exposure levels, a measure aimed at improving credit discipline but one that often limited operational freedom.
Industry analysts say the new rules strike a better balance between risk management and operational flexibility. By introducing a 10 percent exposure threshold for current and overdraft accounts among large borrowers, the RBI ensures that only lenders with meaningful credit exposure maintain operational accounts, thereby mitigating systemic risk while still enabling borrowers to function efficiently. For small and medium enterprises, the unrestricted freedom to open current accounts is expected to reduce dependence on single-bank relationships and improve bargaining power in fee negotiations and cash management services. The central bank’s reforms also reflect evolving market realities. As digital banking, real-time payments and cash-flow-based lending gain prominence, the rigid transactional restrictions of older frameworks no longer align with modern financial systems. Businesses increasingly require agile banking operations, and the RBI’s updated guidelines acknowledge this shift by simplifying rules around transaction accounts. The new norms are likely to accelerate competition among banks, as institutions now have greater latitude to offer customised cash credit and current account packages aligned with customer needs. For borrowers, the immediate impact will be improved cash flow flexibility, faster credit allocation and a reduction in the administrative strain tied to earlier compliance-heavy account structures. For banks, the changes open opportunities to deepen customer relationships by offering bundled products, cash management solutions, digital payment platforms and integrated working capital lines.
Economists view the reforms as part of the RBI’s broader effort to create a more efficient, transparent and responsive banking ecosystem, particularly after feedback from industry stakeholders highlighted friction points created by the previous guidelines. The removal of cash credit restrictions also signals confidence in banks’ ability to monitor borrower behaviour through modern analytics, centralised credit databases and digital reporting systems, reducing the need for blanket restrictions. The updated transaction account rules come at a crucial time for India’s economy, which continues to expand despite global uncertainties. As businesses ramp up activity in manufacturing, logistics, agriculture, retail and services, access to flexible working capital becomes essential. The RBI’s decision is therefore expected to be widely welcomed by the business community, particularly small and medium enterprises that rely on cash credit and current accounts as the backbone of their financial operations.
Overall, the central bank’s move marks a decisive step toward modernising India’s credit architecture and improving the fluidity of financial operations across sectors. By liberalising transaction account norms, the RBI aims to build a more responsive, business-friendly banking system while preserving key risk safeguards. For borrowers and banks alike, the updated framework sets the stage for a more flexible, competitive and growth-oriented financial environment.
RIL Hits ₹20 Trillion Milestone as Shares Surge 2%
PNC _ Thursday, 26-06-2025
In a significant market development, Reliance Industries Ltd (RIL) once again crossed the ₹20 trillion market capitalization mark, driven by renewed investor confidence and recent announcements in the artificial intelligence (AI) and esports sectors. The RIL stock gained nearly 2% on Thursday, touching an intraday high of ₹1,496.8 per share on the Bombay Stock Exchange (BSE).
At 2:09 PM, RIL’s market cap stood at ₹20,25,540.5 crore, reinforcing its position as one of India’s most valuable companies. The BSE Sensex, in comparison, was trading up by 1.03% at 83,608.71, reflecting a broader positive market sentiment.
Despite this fresh rally, RIL’s stock is still down by 4% year-on-year, while the Sensex has climbed 5% over the same period. The stock has a 52-week high of ₹1,608.95 and a low of ₹1,115.55, indicating significant volatility in the last year.
What’s Driving RIL's Stock Momentum?
The uptick in RIL shares comes on the back of strategic announcements made by Mukesh Ambani, chairman of Reliance Industries, signaling the conglomerate's entry into its “next phase of growth powered by AI and deep technology.” Ambani likened this transition to the group’s previous landmark forays into telecom and energy, making it a pivotal move in the company’s evolution.
While Reliance plans to steer clear of high-capital, high-risk ventures such as developing GPUs (graphic processing units), it will instead focus on downstream AI applications that are aligned with national priorities, he stated. These include innovations that enhance digital infrastructure and support scalable enterprise and public sector applications.
Ambani also confirmed that Reliance has successfully built its 5G infrastructure entirely in-house, a significant technological milestone that enhances the company’s telecom capabilities while reducing dependence on external vendors.
RIL Makes Esports Debut via Jio BLAST Joint Venture
Adding to its growth narrative, RIL announced a strategic expansion into the esports and gaming sector through its subsidiary RISE Worldwide. The company has entered a joint venture with BLAST Esports, the gaming division of Danish firm BLAST ApS. Together, they aim to build a vibrant esports ecosystem in India through a new entity named Jio BLAST eSports Private Limited.
As part of the agreement, Jio BLAST allotted 50,00,000 equity shares of ₹10 each to BLAST Esports Limited, totaling an investment of ₹5 crore. With this share allotment, RISE’s stake has been reduced to 50%, effectively transforming Jio BLAST from a wholly owned subsidiary to a joint venture company.
RISE originally incorporated Jio BLAST on April 18, 2025, marking Reliance’s formal entry into the fast-growing esports industry. The move is seen as a strategic effort to tap into India’s young digital-first audience and further diversify RIL’s presence in digital entertainment and new-age businesses.
Market Outlook and Strategic Implications
Reliance’s renewed focus on AI, 5G infrastructure, and esports underscores its long-term vision to lead India’s digital transformation across industries. Analysts suggest that the company’s diversified interests — from energy and telecom to tech-driven services — offer a strong multi-sectoral play for long-term investors.
The fact that RIL has reclaimed its ₹20 trillion market cap despite global market uncertainties and domestic volatility signals strong investor trust and institutional backing.
Disclaimer:
This article is for informational purposes only. Investors should consult certified financial advisors before making any investment decisions.
June IPO Surge Raises ₹19,000 Crore Amid Investor Caution
PNC _ Thursday, 26-06-2925
After months of subdued activity, India’s primary market witnessed a powerful resurgence in June 2025, with both mainboard and SME IPOs launching in large numbers. According to stock exchange data, eight large IPOs and 30 SME listings helped raise a cumulative ₹19,017 crore, marking the strongest monthly fundraising via IPOs in six months.
The sharp rebound follows a slowdown earlier in the year, driven by weak investor sentiment and geopolitical tensions. However, improved macro stability, regulatory pressures, and urgency among companies to capitalize on favorable windows have reignited the IPO engine.
Mainboard IPOs Drive Majority of Fundraising
Of the total, ₹17,688 crore was raised by eight mainboard IPOs, with the lion’s share attributed to HDB Financial Services’ ₹12,500 crore issue. Other major offerings included Kalpataru Projects (₹1,590 crore), Oswal Pumps (₹1,387 crore), and Ellenbarrie Industrial Gases (₹852.53 crore). Additional issuers like Sambhv Steel Tubes and Arisinfra Solutions also contributed to the fundraising momentum.
On the SME side, 30 companies launched IPOs in June to raise a combined ₹1,329 crore, the highest monthly tally in nine months.
Market experts link the surge in activity to Sebi’s regulatory deadlines, which prompted many firms to fast-track their listing plans to avoid the re-filing process in uncertain markets.
Mixed Sentiment: Strong Activity, Cautious Investors
Despite the high volume, analysts urge caution, noting that not all IPOs are created equal. Several companies—especially larger IPOs—attract investor capital at the expense of the secondary market, sometimes hurting overall liquidity. Poor post-listing performance could further depress investor confidence.
Rajnath Yadav, Senior Analyst at Choice Broking, said many IPOs are being launched out of necessity rather than ideal timing. “A majority of recent IPOs are fresh issues, reflecting urgent capital requirements,” he said.
What Should Retail Investors Consider?
Currently, six major IPOs are open for subscription:
- HDB Financial Services
- Kalpataru Projects
- Ellenbarrie Industrial Gases
- Sambhv Steel Tubes
- Indogulf Cropsciences
- Globe Civil Projects
Together, these aim to raise over ₹15,800 crore, with HDB Financial accounting for 80% of the total.
Experts recommend a selective approach. Mahesh Ojha of Hensex Securities and Astha Jain of Hem Securities both back HDB Financial for its long-term growth story, albeit with limited listing gains. Their second pick is Ellenbarrie, with Globe Civil Projects recommended only for short-term plays.
Bajaj Broking echoes similar views, calling HDB Financial their top pick, citing a diversified business model. They also back Sambhv Steel for its niche product range and fair pricing, and Ellenbarrie for its strong fundamentals.
On the flip side, Sourav Choudhary of Raghunath Capital advises avoiding Globe Civil Projects due to low transparency and instead highlights Kalpataru Projects for listing gains only, with caution.
Grey Market Premiums: A Mixed Bag
GMP (Grey Market Premium) trends show moderate optimism:
- Globe Civil Projects: ₹15 premium (~21% pop)
- Sambhv Steel: 10% expected gain
- Indogulf Cropsciences: 10% premium
- Ellenbarrie: ~5% expected gain
- HDB Financial: GMP dropped from ₹75 to ₹50
- Kalpataru: GMP fizzled out completely
This cautious enthusiasm underlines the broader concern about inflated valuations and uncertain listing performance.
Pre-IPO Hype Fades, Experts Urge Caution
In light of HDB Financial’s lower-than-expected pricing, questions are being raised over the hype surrounding pre-IPO investments. Some early investors continue to see gains, but those who joined the bandwagon recently are staring at losses.
Radhika Gupta, a market expert, warned against overhyping unlisted shares and stressed the importance of transparent valuations and long-term vision.
Astha Jain emphasized that IPOs are no longer guaranteed pop generators. The days of massive listing gains are likely behind us—long-term fundamentals should be the primary driver for IPO investors moving forward.
Conclusion: Strategy Over Hype
While June marked a record-breaking revival for the IPO market, experts agree that due diligence and strategic selection are crucial. Investors are encouraged to focus on valuation, growth outlook, and risk appetite, rather than chasing short-term returns.
With ₹19,000 crore mobilized and more listings on the horizon, the IPO season is far from over. But for retail participants, the mantra remains: Choose wisely, invest long-term.
Disclaimer:
This article is for informational purposes only. Investors should consult certified financial advisors before making any investment decisions.