There is good news for those who have been waiting for a long time for the reduction of EMI of other loans including home loan, car loan. The way has been cleared for their EMI to be reduced in the coming days. In fact, retail inflation in the US came down to a more than three-year low of 2.9 percent in July. After this, the Federal Reserve may consider cutting the policy interest rate in September. In India too, the retail inflation rate has come down to 3.54 percent in July, which is a 59-month low. It has become clear that the Reserve Bank of India (RBI) may decide to cut interest rates in the monetary policy meeting to be held in September. This will reduce the EMI of the loan.
The Fed’s decision will also have an impact in India
Retail inflation in the US came down to a more than three-year low of 2.9 percent in July. After this, the Federal Reserve may consider cutting the policy interest rate in September. Releasing retail inflation data on Wednesday, the Labor Department said consumer prices rose by just 0.2 per cent in July compared to June. At the same time, prices rose 2.9 per cent in July compared to a year ago, while the inflation rate in June was three per cent. This is the lowest increase in retail inflation in the US economy on an annual basis since March 2021. This softening in inflation has raised expectations of a cut in the policy rate. The Federal Reserve may take a decision on interest rates in September.
Important issue in US elections
Inflation has become an important issue in the presidential election along with the US economy. Former President Donald Trump has blamed the Biden administration’s energy policies for the price rise. Vice President Kamala Harris said she would soon introduce new proposals to ‘reduce costs and strengthen the economy overall’. The government said almost all of the increase in monthly inflation data reflects higher rental prices and other housing costs, a trend that is declining according to real-time data.
Interest rates will also decrease in India
The fall in inflation rate is a relief news for the central government. The government has given the Reserve Bank the target of keeping the average retail inflation rate around four percent in the medium term. It was above this for a long time. Now that inflation has come under control, the hope of a cut in the repo rate has increased. This will reduce the interest rate on all types of loans. Crores of consumers taking loans will benefit from this.
