The RBI hasn't cut rates since December. Does locking into longer tenure bonds still make sense?

QnA Discussions
1

So the RBI held rates at 5.25% in February and JM Financial is now flagging that yields could harden towards 7% because of the FY27 borrowing programme being Rs 17.2 lakh crore. That is 18% more than last year and higher than what the market was expecting.

I bought a 5yr bond in October when the rate cut narrative was strong. Genuinely second guessing whether that was the peak of the duration trade. Anyone else thinking about this?

2

The borrowing number was the surprise. When supply goes up and RBI is on pause, yields have a natural tendency to drift upward. Not great for people holding long duration on a mark to market basis. Though for buy and hold investors the coupon and principal are unaffected.