RBI's 125 bps Cuts: Why Indian Bond Yields Eased Only 30 bps in 2025

• Indian bond yields eased only 30 bps in 2025 despite RBI's cumulative 125 bps rate cuts.
• Markets anticipated rate cuts early, leading to a rally before RBI acted and limiting further yield compression.
• RBI's unexpected 50 bps cut in June and shift to neutral stance triggered profit booking, pushing yields up.
• Strong GDP growth (8.2% in Q2FY26) and hardening global yields reduced expectations for further easing.
• Rupee depreciation due to US 50% tariffs intensified selling pressure on domestic bonds.

Why It Matters: Market dynamics, global factors, and domestic growth overshadowed RBI's rate cuts in 2025.