The 10-year bond yield crashed to 6.33 percent on Tuesday, a level last seen in December 2016.

The immediate trigger was the wholesale price index (WPI) that came on Monday, which showed a drop in June prices versus a month ago.

Also, the shutdown in auto production and lower FMCG sales are all indicating a slowdown that was more severe and not just triggered by the one-off demonetization or GST. There are quite a few economists who are now calling for a rate cut of 50-100 basis point over the cycle.

First Published:Jul 16, 2019 1:37 PM IST