Anything may happen.

"The US 10-year Treasury yield hit its highest level in 24 years on Thursday (1 October)," as "It rose to as high as 5.342%, surpassing its 2007 peak, and hitting its highest since 2002." Reuters. "French 10-year bond yields have also hit their highest levels since 2002, Britain's 30-year borrowing costs have touched 6% for the first time since 1998 and Japanese bond yields are at multi-decade peaks." "It adds to concerns about governments' rising borrowing and spending needs. The US debt pile has topped $40 trillion, while debt as a share of economic output is at or above 100% across the G7 group of major economies, bar Germany." "Bond yields set the tone for borrowing costs across economies, from government debt to mortgages to student and car loans." Reuters. "Eurozone inflation surged more than expected in September," as "Inflation in the 21 nations sharing the euro currency jumped to 3.8% in September from 3.2% a month earlier, exceeding expectations for a 3.6% in a Reuters poll." However, core inflation, which excludes volatile food and fuel prices, accelerated to 2.5% from 2.4%. Reuters. This might allow the European Central Bank (ECB) to wait and watch before deciding on interest rate. In its last meeting in August, the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) kept its policy rate unchanged at 5.25% for the fourth successive time. Mint. But, the US Federal Reserve Open Market Committee raised the borrowing cost by 25 basis points to 3.75%-4% last month. Higher interest rates in the US, EU and Japan would increase returns and be an incentive for funds to divert their investments to these markets from riskier emerging markets. Already, "India faces a stiff challenge to attract capital flows as the global investment landscape is being reshaped by the artificial intelligence boom, renewed manufacturing ambitions in developed economies and the increasing weaponisation of global supply chains, according to the India Monthly Economic Review." ET. "Foreign institutional investors (FIIs) stepped up selling in Indian equities on 30 September, offloading Rs 101.4841 billion, their biggest single-day outflow in nearly six months." "Domestic institutional investors (DIIs), meanwhile, bought Rs 112.7173 billion, according to the NSE's combined FII/FPI and DII cash-market data." MC. Pressure on bond yields eased somewhat after, "the Commerce Department's Bureau of Economic Analysis said that the Personal Consumption Expenditures Price Index rose 0.3% in August after a downwardly revised 0.1% gain in July. Core PCE inflation increased 3.0% year-on-year in August after a downwardly revised 3.0% advance in July." ET. "The US economy added 29,000 jobs last month, the Labor Department reported, well below economists' estimate of 90,000." Unemployment edged slightly higher to 4.2% from 4.1%. ET. The Finance Ministry's Monthly Economic Review for September 2026 expects the economy to grow 7.3% in the second quarter (July-September). "Interest rates in the developed world are rising sharply...and this will spill over into domestic yields. It also expects cross-border capital flows to slow, as higher rates persuade investors to stay in their home markets amid rising global uncertainty." ET. Already, yield on India 10-year government bonds jumped from 6.944 on 8 September to 7.209 on 1 October. in.investing.com. A lot of problems could be solved if the RBI increased its policy rate by at least 50 basis points, which would restore the premium with US rates, tempt foreign investors to return, stop the rupee from falling and reduce imported inflation. Will the RBI do it? Definitely not. The government has a fanatical belief that low interest rates increase economic growth, which gives bragging rights and helps in elections. What happens if problems mount? Just ignore them. It's called "Ram Bharose' (depend on Lord Ram). Will it work? Probably not, but may confuse people. Then claim anything. Confuse them more. Great.