'Medium-to-long term bonds provide favourable risk-reward opportunity'

From the perspective of interest rates, fiscal deficit becomes a villain when it starts to positively impact growth.

Bond market traders were unnerved after the central bank suggested that rising yields are here to stay. SAURABH BHATIA, head of fixed income at DSP Investment Managers tells Puneet Wadhwa that he expects next round of returns in fixed income instruments to be triggered more by demand – supply of bonds rather than cut in repo rates. Edited excerpts:

Debt funds witnessed an inflow of Rs 91,392 crore in July, reports suggest. Do you expect this pace to continue or will investors turn cautious as economic recovery remains fragile?

World over, the central banks have pushed the fixed income investor to add