The Federal Reserve is likely to hike interest rates in December. That raises a big question in the mind of debt mutual fund investors: when the USA is going to hike rates, will Reserve Bank of India cut rates? A rate cut is a happy news for debt mutual fund investors, especially in long-term debt mutual funds. When yield falls, bonds prices rise, pushing up the Net Asset Value (NAV) of the schemes. That is why a pause or rate hike is not music to debt mutual fund investors.
