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New Delhi: Markets regulator <keyword id="19901201" type="General" weightage="100" keywordseo="Sebi" source="keywords">Sebi</keyword> has proposed allowing Real Estate Investment Trusts (<keyword id="20186402" type="General" weightage="20" keywordseo="REITs" source="keywords">REITs</keyword>), Small and Medium REITs (SM REITs) and Infrastructure Investment Trusts (<keyword id="20186403" type="General" weightage="20" keywordseo="InvITs" source="keywords">InvITs</keyword>) to use <keyword id="21737868" type="General" weightage="20" keywordseo="interest-rate-derivatives" source="keywords">interest rate derivatives</keyword> for <keyword id="23778373" type="General" weightage="20" keywordseo="hedging-risk" source="keywords">hedging risk</keyword>. Also, the regulator has suggested approving locked-in units for REITs and InvITs to be transferred among sponsors and their groups, similar to rules for promoters in listed companies, to help sponsors manage their holdings without compromising "skin in the game". Additionally, Sebi has suggested permitting fixed deposits to be considered as cash equivalents when calculating leverage for REITs and InvITs, clarifying credit rating requirements for REIT and InvIT borrowings, and setting a timeline for filling vacancies on their boards and expanding the asset base for REITs and SM REITs. The regulator has also proposed to permit REITs to invest in liquid mutual funds. It has suggested measures to facilitate ease of doing business for REITs and InvITs, along with investors' protection. According to its consultation paper, Sebi is considering allowing REITs and InvITs to hedge against interest rate fluctuations by using derivatives like interest rate swaps. This could help stabilise cash flows, reduce risks, and protect unitholder interests, especially for long-term infrastructure projects. It is also proposed to define "Common Infrastructure" for REIT regulations. To enhance business flexibility for REITs, it has been proposed to clarify that facilities like power plants, heating/cooling systems, water treatment, and waste treatment plants -- serving one or more REIT assets -- will qualify as "common infrastructure" under REIT rules. This applies even if these facilities are not located within a single project due to their technical requirements. These facilities should supply and be used exclusively by REIT assets. For power plants, however, any excess power can be sold to the state utility/grid as per regulations, with any credits or payments going towards the benefit of REIT assets. To improve transparency, it has been proposed to amend the governance norms for quarterly reporting of InvITs. Currently, quarterly results for the investment manager and its business segments are presented to the investment manager's board, but there is no direct requirement for InvITs to report their performance. The proposed amendment would clarify that quarterly results should specifically reflect the performance of the InvITs themselves, not just the investment managers. This change aligns InvIT regulations with REIT regulations, where the focus is on the quarterly results of the REIT itself. Also, it has been suggested to align the composition of NRCs in REIT and InvIT managers with listed companies under the LODR regulations. Currently, all NRC members for REITs and InvITs must be independent directors. The proposal allows a mix of independent and non-executive directors, similar to listed companies. To enhance investors' protection, Sebi has suggested reviewing conditions for InvITs to borrow beyond the 49 per cent limit, assessing REIT investments in unlisted equity shares and outlining the roles and responsibilities of trustees for REITs, InvITs, and SM REITs. In a separate consultation paper, the regulator has proposed a regulatory framework for "restricted return InvITs" to provide infrastructure investors with predictable returns by setting limits on both upside gains and downside protection. The proposed framework for restricted return InvITs is designed to provide investors with structured returns, capped at both minimum and maximum levels to offer stability. Restricted return InvITs would include downside protection -- a minimum assured return -- and/or an upside restriction, a cap on returns -- depending on the arrangement. These investments would be limited to sophisticated investors who meet high minimum investment thresholds, with each unit priced at a minimum of Rs 500 crore and total InvIT assets of at least Rs 50,000 crore. Investors would be required to sign a waiver and undertaking form, acknowledging their understanding of the structured returns and risks involved, including the transfer of any excess returns to the sponsors. This waiver should be submitted before purchase in both primary and secondary markets, with compliance overseen by merchant bankers or brokers. The Securities and Exchange Board of India (Sebi) has sought public comments on both consultation papers by November 13.

Sebi proposes to allow InvITs, REITs, SM REITs to use interest rate derivatives for hedging risk

Best post office schemes that offer over 7% interest

<div type="image" title="In case RBI is in the mood to hike the interest, your home loan EMIs might end up taking more from your pockets. Or, if it leaves the rates unchanged, your EMIs wont budge one bit" msid="114284206" hostid="261" caption="&amp;lt;p&amp;gt;In case RBI is in the mood to hike the interest, your home loan EMIs might end up taking more from your pockets. Or, if it leaves the rates unchanged, your EMIs wont budge one bit&amp;lt;/p&amp;gt;"></div> On September 18, 2024, the <keyword id="19951097" type="General" weightage="20" keywordseo="us-fed" source="keywords">US Fed</keyword> delivered a jumbo-sized surprise to the global economy. Not only did they trim their interest rates by a massive 50 basis points to bring their yields down to 5%, but also hinted at further rate cuts in the upcoming months. This move from the fed and several other central banks globally had pushed expectations high for a similar rate slash closer home, from the <keyword id="19899808" type="General" weightage="100" keywordseo="rbi" source="keywords">RBI</keyword> this month. But governor <keyword id="19913110" type="General" weightage="20" keywordseo="shaktikanta-das" source="keywords">Shaktikanta Das</keyword>, in a “picture abhi baaki hai” moment, decided to hold the repo rates here steady, leaving them unchanged at 6.5% for the record 10th straight time. Although, he did tinker with the policy stand, changing it from “rate cuts are absolutely off the table” to a more accommodating “we’re okay with bringing down the rates, if needed”. This, rather neutral, stance from India’s financial custodian sparked hopes for a rate cut in December this year. However, the stubborn <keyword id="22195" type="General" weightage="20" keywordseo="inflation" source="Orion">inflation</keyword> levels in September have again dented such hopes. As consumers, you may be wondering what all the hullabaloo this is about, since it hardly makes a difference to your regular financial routine. Well, the majority of both economic growth and inflation is closely connected to this policy stance from the central bank and it does have a rather indirect effect on both our earnings and spending. But more directly, it would have clear implications for those looking to own a house. Even the slightest modification of interest rates, or the lack of it, influences the <keyword id="19916018" type="General" weightage="20" keywordseo="emi" source="keywords">EMI</keyword> you pay significantly. So, all aspiring homebuyers, is this the right time to take out a loan and buy a house? Can you expect a rate cut anytime soon, and what will that mean for your home-owning dreams? We lay it out. <h2>What’s the connection?</h2>You see, buying a house is no small feat, at least financially. The task becomes even more herculean if you are scouting for your own roof in cities like Delhi, Noida, Bangalore or Mumbai where, as Circuit from Munnabhai says, “room shuru hote hi khatam ho jata hai”. Naturally, you’ll have to take a <keyword id="6354730" type="General" weightage="20" keywordseo="Home-loan" source="Orion">home loan</keyword> from the bank. Don’t be mistaken, the bank won't give you a loan that covers 100% of the value of the property you want to own. Rather, your loan amount will be equivalent to a certain percentage of the property’s total value. RBI’s guidelines on this are pretty clear: <ul><li>If your loan amount is up to Rs 30 lakh, you can get a loan worth 90% of the property’s value.</li></ul><ul><li>If the loan amount is between Rs 30 lakh and Rs 75 lakh, you are eligible for a loan worth 80% of the property’s value. </li><li>If you are taking a loan of more than Rs 75 lakh, your loan amount will be equivalent to 70% of the property’s value. </li></ul>Now assuming that you have the money, it's all about paying back the principal amount, but not without a little (read hefty) interest added on top. See, when you’re taking a home loan, you are actually signing up for a long-term, even multi-decadal financial commitment, which will unfailingly present itself to your bank accounts and finances every single month, in the form of EMIs, or equated monthly instalments). When you take a home loan, you can choose to pay the interest in two ways (talk about choices!). One is that you decide to keep a fixed rate of interest throughout the tenure of your home loan. So, if you opt for a 25-year fixed-rate home loan at the rate of 8.8% p.a., you’ll have to pay interest at this rate for the next 25 years, till your entire loan is paid off. Yes, you can go backsies and switch to a floating-rate home loan by paying a fee. Floating, as the name suggests, means that your interest rate is not set in stone. But starting October 2019, when it comes to a floating interest rate home loan, your payable interest and EMIs are directly impacted by any changes in <keyword id="20094323" type="General" weightage="20" keywordseo="repo-rate" source="keywords">repo rate</keyword>, which were left unchanged by RBI this time around. Why are these two so chummy, you might ask. Well, <keyword id="173069" type="General" weightage="20" keywordseo="Home-loan-interest" source="Orion">home loan interest</keyword> rates are a sum of two things: <ol><li>Repo Rate (the rate at which RBI lends money to banks)</li><li>Operational cost + margins</li></ol>Any plus or minus in this equation would send your home loan interests tanking, or skyrocketing. Vivek Iyer, Partner, Grant Thornton Bharat explains that any change in the repo rates impacts the cost of funds and thereby the home loan interest rates. “When the interest rates are expected to reduce, the corresponding impact will be in the form of a reduced EMI. Home loan borrowers should always try to borrow at a floating rate when interest rates are expected to reduce and at a fixed rate when the interest rates are expected to increase. This minimizes the outflow in the form of EMIs that the home loan borrowers will experience”, he continues. So, no change in repo rates means no change in your home loan interest payout and no financial relief whatsoever. A rate cut, which most experts are anticipating will start this December, would mean your EMI payments come down, and your wallet might save a little more. But there’s also a chance of an UNO reverse happening. In case RBI is in the mood to hike the interest, your home loan EMIs might end up taking more from your pockets. Consider this. You took a floating interest rate home loan worth Rs 50 lakh in January 2022 at 8% p.a., for a period of 20 years. This brings your total monthly EMI to Rs Rs 41,822. But, as luck would (or won't) have it, RBI raised the interest rate by 250 basis points between May 2022 and February 2023, bringing it to its current status of 6.5%. Some back-of-the-envelope calculations suggest that now, your home loan interest payout will also rise by a hefty 2.5%, taking the total to 10.5%. In other words, you’ll have to dish out Rs 49,919 per month as EMI. Now, won't you heave a sigh of relief if the RBI were to bring down the interest rate by say, even 50 basis points, or 0.5%? Agreed, your EMI will come down just marginally, to Rs 48,251. But look at this over a 20-year period, and you’ll see how big the difference is. <h2>Are rates set to change anytime soon?</h2>Generally, RBI hikes the repo rates if it sees inflation spiralling out of control. Then, in a bid to reduce consumer spending, it raises interest rates to make borrowing expensive. But when the apex bank sees sluggish consumption in the economy, inflation in control and wants to boost spending, it slashes down on interest rates, making it more lucrative for people to borrow. As of now, most experts are not anticipating any changes in the interest rates anytime soon. This means home loans are not getting cheaper anytime soon. The CPI data, which came out yesterday, saw inflation rise to 5.49% in September, compared to 3.65% last month. Food and beverage prices jumped to a four-month high of 8.36% in September, as opposed to a 5.3% rise in August. So a rate cut seems a no-go at the moment! Apurva Sheth, Head of Market Perspectives and Research, SAMCO Securities explains that the RBI had probably expected a hardening of inflation and that's why it chose to hold on to the rates in the monetary policy announcement last week. “Now, it seems that RBI will take a cautious stance going ahead and will not be in a hurry into rate cuts like its global peers”, he added. In all this, one thing is clear, in the grand movie of the Indian economy, the RBI has chosen stability over drama. And just like in every good Bollywood film, we're left wondering what twist the sequel will bring. Until then, it might be “The End" for rate cuts, but the show must go on for the Indian economy!

Simply Put: Boom or bust — how RBI’s decision to leave rates unchanged affects homebuyers

<ul class="summary-list"><li><keyword id="19979912" type="General" weightage="100" keywordseo="mortgage-rates" source="keywords">Mortgage rates</keyword> are falling but remain high compared to the rates of the past few years.</li><li>Assumable mortgages can help <keyword id="19907145" type="General" weightage="20" keywordseo="homebuyers" source="keywords">homebuyers</keyword> get lower rates and reduce their monthly payments.</li></ul>Over the past few years, <a target="_blank" href="https://www.businessinsider.com/personal-finance/mortgages/average-mortgage-interest-rate">US mortgage rates</a> have fluctuated wildly, leaving both homebuyers and sellers scrambling. In 2021, rates fell to as low as 2.1% as the <a target="_blank" href="https://www.businessinsider.com/how-fed-rate-cut-could-impact-mortgage-rates-homebuyers-2024-9">Federal Reserve</a> acted to keep the economy ticking during the COVID-19 pandemic. But then inflation spiked. To cool inflation, the Fed implemented a series of rate hikes, pushing mortgage rates to a peak of 7.79% in October 2023, according to data tracked by the <keyword id="19904332" type="General" weightage="20" keywordseo="Federal-Reserve" source="keywords" meta.keywordsubtype="org" meta.entityname="Federal Reserve" meta.hostid="261" meta.entityid="Federal Reserve">Federal Reserve</keyword> Bank of St. Louis. But over the last few years, some homebuyers have used a workaround to get lower rates anyway: a lesser-known loan option called an <keyword id="23243178" type="General" weightage="20" keywordseo="assumable-mortgage" source="keywords">assumable mortgage</keyword>. Assumable mortgages let qualifying buyers take over a seller's existing loan, including its interest rate, principal balance, and other terms. This can lead to significantly lower <keyword id="19950650" type="General" weightage="20" keywordseo="interest-rates" source="keywords">interest rates</keyword>, making monthly mortgage payments more affordable and saving thousands over the life of the loan. It's important to note that not all loans are eligible for assumption, but ones backed by the Federal Housing Administration (FHA) and the Department of Veterans Affairs (VA) are. 2024, however, has brought some relief from high rates. In January, <a target="_blank" href="https://www.businessinsider.com/fed-cut-lower-mortgage-rates-should-you-refinance-2024-9">rates</a> hit about 6.7% and have been slowly decreasing since. According to Freddie Mac, the 30-year fixed-rate mortgage dropped to 6.2% as of mid-September, its lowest level since February 2023. The Federal Open Market Committee, which oversees US monetary policy, is expected to <a target="_blank" class="" href="https://www.businessinsider.com/interest-rate-cuts-decision-this-week-federal-reserve-powell-inflation-2024-9">cut interest rates</a> at its <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/banking/when-is-the-next-fed-meeting">meeting</a> this week. This could lead to further declines in mortgage rates in the coming months. Still, the 2%-ish rates of 2021 aren't likely to return as the Fed remains wary of inflation. So while additional rate declines may ease monthly mortgage payments for some, they won't necessarily make homebuying significantly more affordable for most Americans. For that reason, assumable mortgages still might be the best option for some people to get the lowest rates. Here are the stories of three homebuying couples who secured mortgage rates below 3% since March 2023 using assumable mortgages. They described how they redirected the funds they would have spent on higher monthly mortgage payments into healthcare, renovations, or retirement. <h2>One couple got a 2.6% rate and became the youngest homeowners in their families</h2>In 2022, <a target="_blank" href="https://www.businessinsider.com/first-time-buyers-got-lowest-best-interest-rate-assumable-mortgage-2024-3">Grace Lucchese</a> had just graduated from college. Her partner, Mickey Ricard, had finished his military service two years prior. The Gen Z couple had moved into an apartment in Lucchese's hometown of Sudbury, Massachusetts — a town about 40 minutes outside Boston — and found themselves spending much of their incomes on rent. "We were paying ridiculous <a target="_blank" href="https://www.businessinsider.com/rental-market-housing-affordability-real-estate-apartments-2024-1">prices for rent</a>, and our money was going nowhere," Lucchese told Business Insider. "We also have a dog with special needs, so we wanted to find a home with a backyard." <div type="image" title="Grace Lucchese, Mickey Ricard, and their dog at home." height="1701" width="2268" msid="113465770" hostid="261"></div>For the first-time homebuyers, finding an affordable, well-maintained home in their area was challenging. "During our homebuying search, we looked all around Boston," Lucchese said. "We could not find a home that was move-in ready and under $650,000. We put offers on probably seven different homes and got into bidding wars on two." After months of searching and nearly giving up, Lucchese and Ricard finally found their perfect home: a 1,600-square-foot, two-story Colonial built in 1885 with three bedrooms and one bathroom. The home also came with an assumable mortgage. "Our home was originally listed for $429,000," Lucchese said. "When we were <a target="_blank" href="https://www.businessinsider.com/real-estate-investing-how-to-negotiate-best-price-down-2023-4">negotiating with the seller</a> and trying to talk him down on the price, they brought up the assumable loan — I had no clue what that type of mortgage was." After learning about assumable mortgages and realizing they could take over the homeowner's 2.6% rate, they jumped at the opportunity. <div type="image" title="Grace Lucchese and Mickey Ricard's Massachusetts home." height="3024" width="4032" msid="113465773" hostid="261"></div>In January, they made a $13,000 down payment and bought the home for $422,500. With homeowners' insurance included, their monthly payments are around $2,100 — about half of what they would likely pay if they had gotten a traditional mortgage earlier this year. Their mortgage term is 26 years. The couple, now the youngest homeowners in both of their families, are using their monthly savings to renovate their home and help cover their dog's veterinary expenses. "Now that our assumable mortgage is saving us about $2,000 each month, it makes the stress a little less because we have the option of having more money available," Lucchese said. <h2>Retirees who got a 2.75% rate say their lives are easier</h2>In June, <a target="_blank" href="https://www.businessinsider.com/homebuyer-got-low-mortgage-interest-rate-assumable-mortgage-save-retirement-2024-7">Brian Sankey</a>, a retired military police officer, purchased a $400,000 home in Elizabethtown, Kentucky — a small town south of Fort Knox — with an assumable Veterans Affairs, or VA, mortgage. The loan has a 2.75% interest rate and 26 years remaining on its 30-year fixed-rate term. Sankey said it was "a win-win" situation for him and the seller. "The benefit of a loan assumption for the seller was that it allowed them to sell their home at a higher price," Sankey told BI. "For my wife and me, it allowed us to get a lower interest rate." <div type="image" title="Brian Sankey on the beach." height="1200" width="1600" msid="113465776" hostid="261"></div>Sankey said he learned about the assumption feature of Veterans Affairs mortgages years ago but had forgotten about it over time. It wasn't until he came across the four-bedroom, four-bathroom home in Elizabethtown that his memory was jolted. The home's proximity to an Army base led Sankey to suspect that the sellers might be connected to the military and have taken out a VA loan, making an assumable mortgage possible. He was right. However, getting the seller on board wasn't as easy as Sankey had hoped. "They weren't inclined to do it at first because they felt the assumption process would take too long, and they were looking for a quick sale," he said. "But after about 30 days, they realized that cash buyers wouldn't be throwing money at them and agreed to proceed with the assumption." According to Sankey, the assumption process took just about six weeks from the time he and his wife first viewed the home to closing the loan. "I'm happy I remembered it because it made our home purchase more affordable," he said. "Despite the current market conditions and higher interest rates, my wife and I were able to purchase a larger home with lower monthly payments." A smaller mortgage is allowing Sankey and his wife to <a target="_blank" href="https://www.businessinsider.com/personal-finance/how-much-do-i-need-to-retire">retire more comfortably</a>. "I can now use the money I would have spent on high-interest payments to cover living expenses," Sankey said. "We should also have more discretionary income." <h2>A couple is able to pay down medical debts after buying a house in Oregon</h2>In 2022, <a target="_blank" href="https://www.businessinsider.com/couple-got-low-mortgage-when-everyone-getting-high-interest-rate-2024-3">Amy Yzaguirre</a> was diagnosed with cancer. At the time, she and her son were living in Idaho while her husband looked for a job in Oregon. They had planned to reunite in Oregon after he found one and their Idaho home sold. However, following her diagnosis, the couple decided it was best to be together before the Idaho home was sold. Faced with the financial burden of paying the Idaho mortgage and Oregon rent at the same time, they moved into an RV on her parents' property in Tigard, a suburb about 20 minutes outside Portland. "It was pretty rough, but we made it work," Yzaguirre told BI. They lived rent-free in the RV for months while waiting for their Idaho home to sell and Yzaguirre to recover. Then, they began searching for a home to buy in Tigard. <div type="image" title="Amy Yzaguirre and her husband pose in front of the RV they purchased." height="542" width="720" msid="113465772" hostid="261"></div>It wasn't the experience they had hoped for. "It's funny how an area can be a nice, family-friendly, affordable place to live and then suddenly become overpopulated and much more expensive," she said. They eventually toured a townhome in nearby Sherwood listed for $416,000. The seller's flyer noted that a buyer could take over their 2.5% mortgage rate. "I did the math," Yzaguirre said. "The seller was locked in at 2.5%, so if we qualified to assume the loan, our mortgage would be a little over $2,100 a month versus the over $3,000 we would be paying with a traditional mortgage at current market rates. It would save us over $40,000 in the long run." <div type="image" title="Amy Yzaguirre, her husband, and son." height="3024" width="4032" msid="113465778" hostid="261"></div>In March 2023, the couple purchased the townhome for $418,900. They made a down payment of $48,000 and assumed a 30-year fixed-rate FHA loan with an interest rate of 2.5%. They have 28 years left on their mortgage. The money they are saving each month is helping them pay down Yzaguirre's bills. "Even though I was fortunate to have good insurance during chemotherapy and have excellent insurance through my current job, I still had quite a few medical bills to pay off," she said. "With the extra money we have saved on our mortgage payment, I've been able to pay them down." The family also used some of their extra funds to pay off other debts and purchase a Toyota Tacoma pickup truck with cash, covering the full amount upfront Correction: September 19, 2024 — An earlier version of this story misspelled Mickey Ricard’s last name.

3 couples who recently got mortgage interest rates under 3% share how they did it

<ul class="summary-list"><li>This post originally appeared in the Insider Today newsletter.</li></ul>Good morning. Milton has strengthened once again into a Category 5 hurricane. Gas stations across Florida are already <a target="_blank" rel="noopener" href="https://www.businessinsider.com/florida-gas-stations-out-of-fuel-before-hurricane-milton-landfall-2024-10">running out of fuel</a> as millions of people try to flee.In today's big story, we got our first interest-rate cut, <a target="_blank" href="https://www.businessinsider.com/fed-interest-rate-cuts-outlook-economy-recession-no-landing-borrowing-2024-10">but it doesn't feel like it for many consumers</a>.What's on deck:<ul><li>Markets: Roblox is the latest target of <a target="_blank" href="https://markets.businessinsider.com/news/stocks/roblox-stock-price-short-seller-hindenburg-report-gaming-inflated-metrics-2024-10">short-seller Hindenburg Research</a>.</li><li>Tech: The DOJ is considering asking a judge to <a target="_blank" rel="noopener" href="https://www.businessinsider.com/google-search-antitrust-case-doj-remedy-alphabet-2024-10">break up Google</a>.</li><li>Business: Walt Disney World will temporarily <a target="_blank" href="https://www.businessinsider.com/disney-world-shut-down-hurricane-milton-florida-orlando-parks-2024-10">close its doors</a> for Hurricane Milton.</li></ul>But first, we're canceling the landing.If this was forwarded to you, <a target="_blank" href="https://www.businessinsider.com/subscription/newsletter/insider-today">sign up here.</a><h3 id="7fa5f018-5b05-4a37-a8dc-d3f89138bcb3">The big story</h3><h2 id="5fd547b9-ec52-41fc-8e08-4f4b27dd8097">So much for the help</h2><div type="image" title="Business person in a suit holding scissors, preparing to cut strings suspending a stack of cash, with a group of people standing below" height="1500" width="2000" msid="114087130" hostid="261" sizebytes="264596"></div>The US economy is having an Instagram vs. reality moment.Last month's interest-rate cuts were supposed to kick off a new era. After two years of battling inflation, the Federal Reserve finally claimed victory. More rate cuts were coming, which meant lower borrowing costs for everyone.<a target="_blank" href="https://www.businessinsider.com/fed-interest-rate-cuts-outlook-economy-recession-no-landing-borrowing-2024-10">But the relief many were hoping for isn't materializing</a>, writes Business Insider's Jennifer Sor. Let's break down why.We finally got an interest-rate cut, but borrowing costs are still high. What gives? First off, last month's interest-rate cut wasn't going to provide immediate relief. It takes time for cuts to trickle down to consumers. The Fed also telegraphed the cut, so the market started pricing it in.That seems fair, but borrowing rates are still rising in some cases. Yes, the average 30-year fixed mortgage rate <a target="_blank" href="https://www.businessinsider.com/mortgage-rate-increase-since-federal-reserve-cut-interest-rates-housing-2024-10">has gone up 47 basis points since the Fed cut rates</a>, writes BI's Matthew Fox.So the Fed cut rates but borrowing costs went up? How is that possible? You can thank the 10-year Treasury yield, <a target="_blank" href="https://www.businessinsider.com/economy-outlook-impact-of-rate-cuts-10-year-treasury-yields-2024-9">which is a key benchmark used by</a> lenders. It went above 4% this week for the first time since August.I'm confused. Why is there such a discrepancy between the two? The Fed's rate is focused on the short-term while the 10-year Treasury reflects a longer-term view (hence the name). As a result, the 10-year bond yield can diverge from the Fed's benchmark rate.Gulp So what does the 10-year Treasury rising mean for the economy? Big picture, it's a good thing. Thanks to a stellar jobs report, investors have a positive view of the economy's future. But the downside is we shouldn't expect the slew of rate cuts investors were banking on. The economy will likely avoid a recession and not need the help.Is this a soft landing or a hard landing? Neither. It's considered a "no landing" because the economy remains strong, but in a way that risks reigniting inflation, which would hamstring the prospect of future stimulative rate cuts.What's with all the aviation metaphors? I don't know.OK, so at this rate, will I ever be able to buy a house? It's honestly not as bad as it seems. BI's James Rodriguez, who's covered the housing market for a while, <a target="_blank" href="https://www.businessinsider.com/housing-market-ice-age-homebuyers-mortgage-rates-spring-real-estate-2024-10">has a piece on why the industry's ice age is starting to thaw</a>. There was a 34% year-over-year increase in active listings in September. More inventory will help unstick the economy.<h3 id="77f31a4c-8462-4e3d-a71f-838cb79493fb">News brief</h3><h2 id="1fcd294b-3f53-425f-9f20-4093e8623b59">Top headlines</h2><ul><li>The Kremlin says <a target="_blank" rel="noopener" href="https://www.businessinsider.com/kremlin-says-trump-sent-putin-covid-tests-pandemic-denies-calls-2024-10">Trump sent Putin COVID tests</a> during the pandemic, but denies subsequent calls.</li><li>Boeing's negotiations with union leaders <a target="_blank" rel="noopener noreferrer" href="https://www.businessinsider.com/boeing-strike-negotiations-union-leaders-break-down-after-two-days-2024-10">break down 2 days after restarting</a>.</li><li>Exclusive: AI cloud startup Ori is in talks to raise up to $80 million in funding, <a target="_blank" href="https://www.businessinsider.com/ori-gpu-ai-startup-talks-raise-funding-nvidia-2024-10">sources say</a>.</li><li>A surprising company <a target="_blank" rel="noopener" href="https://www.businessinsider.com/robotaxi-ridesharing-tesla-waymo-uber-2024-10">might beat Elon Musk</a> in the robotaxi race.</li><li>Influencers are swiping a new black card at <a target="_blank" href="https://www.businessinsider.com/influencer-marketing-startup-oth-network-pays-creators-products-services-2024-10">restaurants, spas, and fitness studios</a>.</li><li>I don't allow Roblox in my house. <a target="_blank" rel="noopener" href="https://www.businessinsider.com/roblox-not-allowed-my-child-kids-why-explained-2024-10">Here's why</a>.</li></ul><h2 id="8120060b-ae66-48dc-b149-f0489a30ffa2">3 things in markets</h2><div type="image" title="Photo of wave hitting Florida park" height="1000" width="2000" msid="114087135" hostid="261" sizebytes="112966"></div><ol><li>The Hurricane Milton trade is in full effect, according to US natural gas futures. Energy traders are betting the storm barreling toward Tampa will cause power outages in multiple states. <a target="_blank" href="https://markets.businessinsider.com/news/commodities/hurricane-milton-power-outage-florida-electricity-natural-gas-prices-futures-2024-10">Futures on US natural gas have dropped 8% over the past few days</a> as power plants are expected to be left idling as demand evaporates.</li><li>A short-seller takes aim at Roblox for "lying to investors." Hindenburg Research accused the online gaming platform of <a target="_blank" href="https://markets.businessinsider.com/news/stocks/roblox-stock-price-short-seller-hindenburg-report-gaming-inflated-metrics-2024-10">inflating its user numbers</a> by including bots and players with multiple accounts. It also called Roblox a "pedophile hellscape," claiming child users are exposed to grooming and pornography. A Roblox spokesperson said in a statement it "totally" rejected the claims made in the report.</li><li>Bank of America is bullish on stock gains ahead of this earnings season. "The bar isn't high," BofA analysts said in a Tuesday note. Stocks should rise as long as companies report they're <a target="_blank" href="https://markets.businessinsider.com/news/stocks/stocks-q3-earnings-lower-rates-stocks-returns-outlook-bofa-2024-10">feeling good about lower rates</a>.</li></ol><h2 id="f4b54806-7f81-450c-ba32-92560d4fae9b">3 things in tech</h2><div type="image" title="Vinod Khosla" height="900" width="1200" msid="114087136" hostid="261" sizebytes="76966"></div><ol><li>OpenAI's exec exodus might actually be a good thing, Vinod Khosla says. The legendary investor backing OpenAI has <a target="_blank" href="https://www.businessinsider.com/openai-vinod-khosla-fixing-ai-image-2024-10">plenty of confidence in the startup</a>, even after multiple high-profile exits. He also thinks the AI industry is catching strays from "Luddites" — those who think the tech is a slippery slope into a Westworld-ian apocalypse.</li><li>The DOJ may seek to break up Google. After a major antitrust lawsuit against Google, a federal judge ruled that it illegally monopolized online search. Now, prosecutors are proposing "behavioral and structural remedies." If enacted by a judge, the changes could <a target="_blank" rel="noopener noreferrer" href="https://www.businessinsider.com/google-search-antitrust-case-doj-remedy-alphabet-2024-10">force a major reorganization or even a breakup</a> of some of Google's basic businesses, including its search engine.</li><li>Where are the Gen Z Mark Zuckerbergs? Gen Zers, aged 13 to 27, haven't produced any big-name tech founders like previous generations. But don't just blame it on Zoomers' blasé attitudes toward work — <a target="_blank" href="https://businessinsider.com/gen-z-tech-founder-gap-zuckerberg-bezos-holmes-2024-10">there's a bigger reason</a>.</li></ol><h2 id="9260fa45-d397-4b3c-b4f8-4bb193976216">3 things in business</h2><div type="image" title="A screenshot of zara.com" height="1500" width="2000" msid="114087133" hostid="261" sizebytes="93076"></div><ol><li>Zara's bizarre website is the secret to its success. The site, which feels more like a magazine spread than an online retailer, is routinely roasted for being "virtually unusable." But experts say <a target="_blank" href="https://www.businessinsider.com/zara-website-memes-mocked-secret-success-aspirational-luxury-consumers-2024-10">there's a method to Zara's madness</a>: It's meant to project an upscale image, distancing itself from other fast-fashion brands.</li><li>The "happiest place on earth" takes a rain check. There are literally storm clouds forming over Florida's family-friendly amusement parks, as the state braces for Hurricane Milton. It's a <a target="_blank" href="https://www.businessinsider.com/disney-world-shut-down-hurricane-milton-florida-orlando-parks-2024-10">rare occasion for Disney World</a>, which has only closed its gates nine times in more than 50 years.</li><li>Tesla executives are hitting the exits. In the past week, <a target="_blank" href="https://www.businessinsider.com/elon-musk-loses-4-top-executives-ahead-of-robotaxi-event-2024-10">four of Elon Musk's direct reports have announced they're leaving</a>, or have already left, the company. Their departures come ahead of Robotaxi Day tomorrow, where Musk is tasked with convincing investors that Tesla is more than just a car company.</li></ol><h2 id="9f5d80ac-3466-429f-a50a-2ffbb70c65ff">What's happening today</h2><ul><li>Hurricane Milton is projected to hit the west coast of Florida, including the Tampa Bay area.</li><li>Federal Open Market Committee's September meeting minutes and forecast published.</li></ul>The Insider Today team: Dan DeFrancesco, deputy editor and anchor, in New York. Jordan Parker Erb, editor, in New York. Hallam Bullock, senior editor, in London. Milan Sehmbi, fellow, in London. Amanda Yen, fellow, in New York.

Why the interest-rate cut isn't delivering the relief consumers were hoping for

The Reserve Bank of India (RBI) may begin lowering <keyword id="19950650" type="General" weightage="20" keywordseo="interest-rates" source="keywords">interest rates</keyword> around October, provided that external factors like weather conditions and international commodity prices do not cause any disruptions, the credit rating agency, Crisil said in its report. The credit rating agency further anticipated that it expects "two rate cuts this fiscal." It said that the decision of the <keyword id="19913109" type="General" weightage="20" keywordseo="Monetary-Policy-Committee" source="keywords">Monetary Policy Committee</keyword> (MPC) decision to hold rates in its recent announcement was due to the elevated <keyword id="19999654" type="General" weightage="20" keywordseo="food-inflation" source="keywords">food inflation</keyword>. The climate conditions such as weather events are frequently changing and they need to be monitored. Going ahead, it anticipated that the macroeconomic environment would be better, creating a background for a rate cut. "The food challenge to a rate cut is expected to ease as agriculture prospects look better than last year. The monsoon has been above normal (7 per cent above the long period average as of August 7), and sowing has picked up across major foodgrains. As agriculture prospects become clearer by September, we expect it to pave the way for a rate cut," the S&amp;P's arm added in its report. In a move reflecting its cautious approach amid ongoing economic uncertainties, the RBI has decided to keep the <keyword id="20094323" type="General" weightage="20" keywordseo="repo-rate" source="keywords">repo rate</keyword> unchanged at 6.5 per cent. The decision to keep the repo rate steady comes amidst persistent concerns about <keyword id="19895000" type="General" weightage="20" keywordseo="inflation" source="keywords">inflation</keyword>, which remains above the RBI's target range. The central bank's commitment to bringing inflation down to its 4 per cent target continues to face challenges due to ongoing food inflation and other economic factors. Noting a likely uptick in core inflation, the report added that factors such as international freight costs, geopolitical risks to crude oil prices, and hikes in domestic telecom tariffs could affect this indicator. Anticipating the growth, it added, "The pace of growth of the economy is expected to ease this year, with lower fiscal support as the government pursues <keyword id="20101140" type="General" weightage="20" keywordseo="fiscal-consolidation" source="keywords">fiscal consolidation</keyword>." Announcing the MPC's decision on August 8, RBI Governor Shaktikanta Das expected the real Gross Domestic Product (GDP) growth of 7.2 per cent for the fiscal year 2024-25. Governor Das emphasized that the RBI remains vigilant regarding inflationary pressures and will take necessary actions to maintain price stability while supporting the country's economic recovery. The MPC's decision reflects a balanced approach, aiming to control inflation without stifling growth. The adjustments in repo rate have a direct effect on <keyword id="19900794" type="General" weightage="20" keywordseo="economic-growth" source="keywords">economic growth</keyword> and job creation. The lower interest rates tend to stimulate economic growth by making borrowing cheaper for businesses.

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