Indian government bond yields have stalled, trading in a narrow range for a second consecutive session as the momentum behind a four-week rally dissipates.
The previous upward pressure on yields was largely driven by rising oil prices, which heightened inflation concerns and forced investors to repricing the duration risk in sovereign debt.
With energy costs stabilizing, that specific catalyst has weakened, leaving the market in a holding pattern.
The consolidation reflects a broader wait-and-see approach among fixed-income investors.
With the Federal Reserve meeting imminent, market participants are hesitant to take directional positions until the central bank signals its next move on interest rates.
The Fed’s policy decision is expected to provide critical guidance on the global liquidity environment, which directly influences capital flows into emerging markets like India.