Interest rates have slowly moved northward . This has started affecting the stock markets. Real estate , Bank and Auto are be the sectors that may take a major beating on their growth. As far as the consumer is concerned, its a good thing for people who are having to cash to invest in fixed instruments . Return on FDs and debt instruments may go up again further due to the liquidity crunch.Floating rate home loan borrowers will be the worst affected with these hikes. No one bothers about the long term economic impacts when settling for a floating rate loan. They tend to suffer a lot during these cycles. we can expect a major crash in real estate prices if this trend continues.(and a lot of NPAs for the banks too)
Since the inflation is high .Limit yourself to 'Vital and Essential' spending, try to invest your extra money in FDs, Stick on to your SIPs ( there is no need to panic for the long term investors). Borrowers can try to part pay their loans , if possible and escape the wrath of higher interest rate .