Can the RBI governor's tie colour predict rate moves? What SBI report says
SBI Research warned that everything in the report should be taken 'on a lighter note'.
'Imagine a world where interest rates aren't determined by models, mandates or macroeconomic indicators—but by midnight tweets, personal equations and possibly necktie colours,' reads the opening sentence of the report, which then goes on to explore how certain words in the governor's speeches could indicate a policy shift, and how the colour of his necktie could affect repo rates.
Necktie Nomics
While firmly tongue-in-cheek, the report draws on psychological theory and past policy announcements to examine whether there could be a pattern between necktie tones and interest rate actions.
The section titled 'Necktie Nomics: When Fashion Meets Fiscal Signals' breaks down tie colours worn by the RBI governor into four tone categories: Warm (reds, peach, orange), Cool (blues, aqua), Dark (black, navy), and Mixed (purple, yellow).
What colours could mean
According to the analysis, warm tones were slightly hawkish – more likely to appear during rate hikes.
Cool tones were associated with neutral stances, often preceding no change in the repo rate.
Dark colours seemed to signal decisiveness, showing up during significant moves like the recent 50-basis-point cut.
Mixed tones, finally, were deemed the least predictable, with the highest variation in outcomes.
The SBI Research team then introduced Tie Volatility and Tilt Index (TVTI). This metric blends a tone's average policy direction with how consistently it points that way.
A high score suggests the colour sends a strong and reliable signal. For example, red and coral ties leaned hawkish, while light blues consistently mapped to periods of no change.
The report acknowledges its own light-hearted nature, noting that these findings should be 'taken with a pinch of sugar.' However, it did note that 'in the uncertainties besieged world, Dark looks more associated with decisiveness as it clearly happened in the recent jumbo rate cut of 50 bps' – referring to the dark-coloured tie that Governor Sanjay Malhotra while announcing a surprise 50 bps rate cut last month.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Economic Times
an hour ago
- Economic Times
Tariff fears hit pharma, but long-term story remains intact: Krishnan VR
Live Events (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel "Within this framework, if we consider sectoral strategies tactically, especially given recent RBI actions in the last monetary policy—cutting CRR by 100 basis points and the repo rate by 50 basis points—these are somewhat positive developments, particularly for companies offering fixed-rate loans. These loans won't be immediately repriced to a lower rate, while the cost of funding (i.e., liabilities) will fall faster. This can support net interest margins for companies like vehicle financiers," says Krishnan VR , begin with, corporate earnings growth in India is likely to become scarcer going forward. If you look at nominal GDP growth, broadly speaking, real GDP is forecasted at around 6–6.5%, while inflation has come down to about 3.5–4%, based on last month's CPI reading. Even with a few percentage points added here and there, in a best-case scenario, aggregate corporate earnings growth is unlikely to exceed 12–13%.Furthermore, Indian corporates are significantly less leveraged today compared to five years ago. So, the difference between revenue growth and bottom-line EPS growth should be minimal at the aggregate level. As a result, we believe companies that can deliver earnings growth in this environment will command a premium—which is to be therefore, should be more selective. Secondly, they need to be more valuation-aware—both relatively and absolutely—and focus on fundamentals rather than this framework, if we consider sectoral strategies tactically, especially given recent RBI actions in the last monetary policy—cutting CRR by 100 basis points and the repo rate by 50 basis points—these are somewhat positive developments, particularly for companies offering fixed-rate loans. These loans won't be immediately repriced to a lower rate, while the cost of funding (i.e., liabilities) will fall faster. This can support net interest margins for companies like vehicle keep in mind that over the past year, the yield curve has steepened by about 100 basis points compared to its previously flat the tariff-related headlines—which we now see almost daily—let's take the IT sector as an example. It's down around 9% in the first half of this year, compared to the Nifty's decline of about 8%. This indicates the extent of derating in the sector, possibly driven by fears of a US recession or economic if we actually look at US economic data from May or the previous month, it has consistently surprised on the upside. For instance, last week's payrolls data was stronger compared to the same period last year. So, the bearish outlook on the US economy isn't supported by hard data as of that, the underperformance of IT stocks seems to be more sentiment-driven than fundamentally justified. There could be some scope for clawing back the derating, even though we don't see any strong fundamental triggers. Most large-cap IT companies are still delivering mid- to high-single-digit revenue growth, so fundamentally, there's no major the other hand, sectors like pharma are facing real tariff-related issues. We even saw fresh news from the US yesterday. Still, if one adopts a longer-term view, many Indian pharma companies may present attractive we take a long-term view, we recently published a study comparing the performance of cyclical or value stocks—like low P/E stocks—with quality or defensive stocks over a 20-year period. Interestingly, the overall performance of both styles has been broadly typically happens is that one style outperforms the other over shorter spans—say 5 to 10 years. For example, from 2002 until the Lehman Crisis, value stocks did exceptionally well. Post-Lehman until COVID, quality stocks took the lead. Then again, post-COVID, cyclical stocks outperformed—driven by factors like strong government capex and the fact that many of these stocks were heavily derated during COVID due to lockdown-related a result, these stocks performed strongly over the last five years, outpacing defensive quality portfolios by a wide looking ahead, with government capex likely to moderate and inflation trending lower, the environment may once again become more favourable for quality and defensive investing—compared to the cyclical names that have already had a strong run.
Time of India
an hour ago
- Time of India
Tariff fears hit pharma, but long-term story remains intact: Krishnan VR
Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads "Within this framework, if we consider sectoral strategies tactically, especially given recent RBI actions in the last monetary policy—cutting CRR by 100 basis points and the repo rate by 50 basis points—these are somewhat positive developments, particularly for companies offering fixed-rate loans. These loans won't be immediately repriced to a lower rate, while the cost of funding (i.e., liabilities) will fall faster. This can support net interest margins for companies like vehicle financiers," says Krishnan VR , begin with, corporate earnings growth in India is likely to become scarcer going forward. If you look at nominal GDP growth, broadly speaking, real GDP is forecasted at around 6–6.5%, while inflation has come down to about 3.5–4%, based on last month's CPI reading. Even with a few percentage points added here and there, in a best-case scenario, aggregate corporate earnings growth is unlikely to exceed 12–13%.Furthermore, Indian corporates are significantly less leveraged today compared to five years ago. So, the difference between revenue growth and bottom-line EPS growth should be minimal at the aggregate level. As a result, we believe companies that can deliver earnings growth in this environment will command a premium—which is to be therefore, should be more selective. Secondly, they need to be more valuation-aware—both relatively and absolutely—and focus on fundamentals rather than this framework, if we consider sectoral strategies tactically, especially given recent RBI actions in the last monetary policy—cutting CRR by 100 basis points and the repo rate by 50 basis points—these are somewhat positive developments, particularly for companies offering fixed-rate loans. These loans won't be immediately repriced to a lower rate, while the cost of funding (i.e., liabilities) will fall faster. This can support net interest margins for companies like vehicle keep in mind that over the past year, the yield curve has steepened by about 100 basis points compared to its previously flat the tariff-related headlines—which we now see almost daily—let's take the IT sector as an example. It's down around 9% in the first half of this year, compared to the Nifty's decline of about 8%. This indicates the extent of derating in the sector, possibly driven by fears of a US recession or economic if we actually look at US economic data from May or the previous month, it has consistently surprised on the upside. For instance, last week's payrolls data was stronger compared to the same period last year. So, the bearish outlook on the US economy isn't supported by hard data as of that, the underperformance of IT stocks seems to be more sentiment-driven than fundamentally justified. There could be some scope for clawing back the derating, even though we don't see any strong fundamental triggers. Most large-cap IT companies are still delivering mid- to high-single-digit revenue growth, so fundamentally, there's no major the other hand, sectors like pharma are facing real tariff-related issues. We even saw fresh news from the US yesterday. Still, if one adopts a longer-term view, many Indian pharma companies may present attractive we take a long-term view, we recently published a study comparing the performance of cyclical or value stocks—like low P/E stocks—with quality or defensive stocks over a 20-year period. Interestingly, the overall performance of both styles has been broadly typically happens is that one style outperforms the other over shorter spans—say 5 to 10 years. For example, from 2002 until the Lehman Crisis, value stocks did exceptionally well. Post-Lehman until COVID, quality stocks took the lead. Then again, post-COVID, cyclical stocks outperformed—driven by factors like strong government capex and the fact that many of these stocks were heavily derated during COVID due to lockdown-related a result, these stocks performed strongly over the last five years, outpacing defensive quality portfolios by a wide looking ahead, with government capex likely to moderate and inflation trending lower, the environment may once again become more favourable for quality and defensive investing—compared to the cyclical names that have already had a strong run.
Mint
2 hours ago
- Mint
Bank holiday today: Are banks closed today for Guru Purnima on July 10? Check full schedule here
Bank holiday today: Today is Guru Purnima, or Teacher's Day in India, but Thursday, July 10 is not a listed holiday this year, and banks will function as usual. Notably, the second and fourth Saturdays and all Sundays are weekly holidays for all public and private banks across India, including the State Bank of India (SBI). Besides this, there are a total of seven listed bank holidays in July this year. The RBI and state governments create a list of holidays for banks, taking into account national and local occasions, operational requirements, religious celebrations and other cultural observances. The central bank makes the announcement through its official website and notifications to banks and other financial institutions. Guru Purnima, an auspicious occasion celebrated across India, is a day dedicated to honouring our teachers — be it spiritual guides or academic mentors. It emphasises and promotes the values of gratitude, reverence, wisdom, and knowledge. As per the Hindu lunar calendar, Guru Purnima is celebrated in the Hindu month of Ashadha (June-July) on the full moon day (Purnima). In Hinduism, the day holds great religious importance, commemorating the birth of Maharishi Veda Vyasa, the legendary sage who compiled the Hindu epic — Mahabharata and is revered as one of the greatest spiritual teachers in Indian tradition. The festival also holds deep significance in Buddhism, and Jainism. Buddhists mark this day in honour of Lord Buddha, as it is believed he delivered his first sermon at Sarnath on this very date after attaining enlightenment. Jains observe Guru Purnima to pay respects to Lord Mahavira and his chief disciple Gautam Swami. July 3 (Thursday) — Kharchi Puja — Banks will be closed in Agartala to celebrate Kharchi Puja, a Hindu festival in Tripura dedicated to fourteen deities called Chaturdasha Devata. July 5 (Saturday) — Guru Hargobind's Birthday — Banks will be closed in Jammu and Srinagar to mark Guru Hargobind's Birthday, the sixth of the ten Sikh Gurus. July 6 (Sunday) — Banks closed pan-India. July 12 (Saturday) — Banks closed pan-India for second Saturday. July 13 (Sunday) — Banks closed pan-India. July 14 (Monday) — Beh Deinkhlam — Banks will be closed in Shillong for Beh Deinkhlam, a festival celebrated by the Jaintia tribe in Meghalaya. July 16 (Wednesday) — Harela — Banks in Dehradun will be closed for Harela, a festival celebrated in the Kumaon region of Uttarakhand and some parts of Himachal Pradesh. July 17 (Thursday) — Death Anniversary of U Tirot Singh — Banks will remain shut in Shillong, marking the death anniversary of U Tirot Singh, one of the chiefs of the Khasi people. July 19 (Saturday) — Ker Puja — Banks in Agartala will be closed for Ker Puja, a festival celebrated in Tripura. It is dedicated to Ker, the region's guardian deity, who protects from calamities and external threats. July 26 (Saturday) — Banks closed pan-India for fourth Saturday. July 27 (Sunday) — Banks closed pan-India. July 28 (Monday) — Drukpa Tshe-zi — Banks in Gangtok will be closed for Drukpa Tshe-zi, a Buddhist festival that falls on the fourth day of the sixth month in the Tibetan lunar calendar. This day marks Lord Buddha's first sermon.
