'Shorter-duration accrual products today make better investments'

What's your view on debt markets and yield curve from here on? Do you expect more rate cuts going forward? When can we expect a rate reversal? We don't expect a rate cut, given the fact that the economy has rebounded out of the pandemic-caused slowdown and the overall policy response both on the monetary and fiscal sides has been very supportive. In the Budget announcements made recently, the government has prioritised growth over fiscal consolidation for the next year as well, which clearly indicates that in the future, we will see better growth numbers. In terms of rate reversal, while we believe that in the initial part, there may be some slack in the economy, it is very difficult to pin-point exactly at which point the rate reversal will happen. At some point, as the slack in the economy gets covered, the RBI will need to move back towards a normal interest-rate regime. The current interest regime largely factors the pandemic slowdown and interest rates will have to normalise at some point in time. What's your advice to fixed-income investors from here on? The gap between the trailing one-year returns and the current YTMs is pretty wide. The short-duration accrual products today make better investments, given that we expect the RBI to start rate reversal at some point in