Central Bank Federal Reserve has once again cut the interest rates. This time the Fed has reduced its key lending rate by 0.25 percentage points, due to which the new range has been fixed from 3.75% to 4%. This decision has come at a time when the threat of inflation has reduced somewhat, but the slowdown in the labor market remains a cause for concern. Interestingly, this decision comes during the US Government Shutdown, which has been going on for over a month, with official economic data not being available. In such a situation, the Fed has to depend on private data sources and alternative reports. The US economy lost nearly 32,000 jobs in September, indicating an economic recession. On the other hand, Trump Administration’s Tariffs have again fueled the fear of inflation. Now politics has also become heated – Donald Trump has indicated that he may announce a new Chair in place of Fed Chair Jerome Powell by the end of this year, while Powell’s term is to end in May next year.

There is relief news for general public and businessmen before Diwali! Reserve Bank of India (RBI) can cut 25 Basis Point in the next MPC meeting to be held on 29-30 September. This information is given in the latest report of State Bank of India (SBI). According to the report, inflation rates can go below 2% in September and October and by fY 2027 it is expected to be 4% or less. The impact of GST rates will also be clearly visible – inflation may fall by 1.1% in October, which may be the lowest level after 2004. In August, the CPI was above 2%, but was much lower than the RBI estimates (3.2%). If RBI reduces the REPO rate this time, the EMI of Home Loan, Personal Loan and Business Loan can be relieved. The RBI has already cut 0.50% in June, and now the Indian market is expected to have cheaper rates after the cut by American Federal Reserve.

If you have taken a loan or are making a plan to take a loan, then this news is very beneficial for you. HDFC Bank has made a change in its MCLR (Marginal Cost of Funds-Based Lending Rate), which will make the EMI burden falling on the pockets of millions of loan holders. It has been 8.65%, which was earlier 8.70%. 2-year-old MCLR has also come down from 8.75% to 8.70%. Other tenures like overnight, 1- month, 3-month and 3-year rates are stable. Given the rates, 1 BPS = 0.01%. This change will directly benefit the customers whose Loan is link to MCLR. MCLR was started by RBI in 2016 to bring transparency in loan rates. Currently, Bank’s Base Rate is 9.35% and Benchmark PLR is 17.85% (effective from 25 June 2025). If you are thinking of taking Home Loan, Personal Loan or Auto Loan, then this can be the right opportunity.

If you are thinking of buying a house in this festive season, then there is good news for you. The fall in interest rates of home loan first and now proposed GST reforms can reduce the prices of homes. The government is preparing to reduce 4 GST slabs to 2 slabs, especially on building materials such as cement, steel and paint, GST can be reduced from 28% to 18%. This will reduce the cost of developers and reduce the construction cost of 1000 square feet flat to about ₹ 1.5 lakh. According to the report of Real Estate Consultant Company Anarock, GST reforms can reduce the prices of affordable flats by about 4% i.e. ₹ 2.5 lakh. Also, the fall in home loan interest rates by 1% will reduce your EMI and it is possible to defend about ₹ 8 lakh on a loan of 50 lakhs. The RBI is also expected to cut the repo rates in the future, which can increase the budget of your purchase even more. Taking a house in this festive season can bring double advantage for you – low prices and better loan options. Therefore, this can be the right time to take your dream home.