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U.S. Federal Reserve Chair Jerome Powell recently shared that the economy is doing better than expected. When the Fed started lowering interest rates in September, they thought the economy was weaker. Now, Powell says the job market looks good, the economy is growing stronger, and inflation is a bit higher than they thought.

Powell spoke at a New York Times event, and his comments came just before a big Fed meeting on December 17-18, where they are likely to make more decisions about interest rates. Some Fed officials, like Christopher Waller, have hinted they might cut rates again soon, unless new data suggests otherwise. Powell seems to agree with this cautious approach.

He mentioned that the Fed’s previous rate cut was a signal to support jobs if the market was weak. But now, better data suggests the economy is stronger than they had anticipated.

Federal officials will soon get new data on jobs and inflation that will help them decide what to do next. Powell emphasized that their decisions are based on the current situation, not on what might happen in the future.

Other Fed officials like Alberto Musalem and Thomas Barkin are also being careful. They want to look at new information before making any promises about future rate cuts. The inflation rate remains above the Fed’s target of 2%, so they are keeping a close watch on it.

With mixed signals from various reports—some showing stronger spending and others pointing to concerns about rising prices—Fed officials are staying on alert and cautious about their next moves.

The stock market had a rollercoaster day and ended almost unchanged, taking a short break after rising for three days. Today, we should watch out for shares of Vodafone Idea, Indus Towers, Torrent Pharma, Bharat Forge, and Indraprastha Gas because of several important news updates.

PG Electroplast: This company started a plan to raise up to ₹1,500 crore by selling shares, aiming for a price between ₹690 and ₹699 each.

Bondada Engineering: They got an order worth ₹108.9 crore from the Bihar Renewable Energy Development Agency.

Force Motors: Their sales grew by just 0.05%, totaling 1,885 units in November, up from 1,884 units last year.

Torrent Pharma: They made a deal with Boehringer Ingelheim to buy 3 brands that help manage diabetes.

Bharat Forge: This company also plans to raise money by selling shares, setting a starting price of ₹1,323.54 each.

Technopack Polymers: Their board approved a plan to give bonus shares to current shareholders, meaning each shareholder will receive one extra share for every share they already own.

Indraprastha Gas: This gas company will suggest giving out bonus shares to its shareholders at a board meeting on December 10.

Vodafone Idea and Indus Towers: Keep an eye on these two companies because Indus Towers announced that they have released a 3% pledge of shares by Vodafone’s Promoters to ensure Vodafone Idea pays its debts.

In October 2024, money from Mutual Funds (MFs) to Non-Banking Financial Companies (NBFCs) jumped by 47%. In contrast, banks only increased their lending to NBFCs by a small 6%. This rise shows that MFs stepped up to help NBFCs because banks are being more cautious due to new rules.

The total money MFs have lent to NBFCs is now around Rs 2.33 lakh crore, which is a 47.1% increase from last year. Although we don’t have details about the exact amounts for each type of loan, experts believe that NBFCs have been borrowing more through bonds than through commercial papers (CPs).

NBFCs have been more careful with their borrowing because they worry about keeping up their rapid growth in loans. Meanwhile, banks, which have traditionally been a big source of money for NBFCs, reported only a 6.4% increase in lending over the past year—the slowest growth in almost a year. Since November 2023, bank loans to NBFCs have been steady at around Rs 14-15 lakh crore. This slowdown is partly because the Reserve Bank of India has raised risk rules for banks when lending to NBFCs.

To find new sources of money, NBFCs are now looking beyond banks. They are exploring options like non-convertible debentures (NCDs), commercial papers, and foreign currency loans. According to Crisil ratings, the share of NCDs in NBFC borrowing grew by 0.30% in the April to June quarter, reaching 28.5%. Even NBFCs with lower ratings are trying to get into the market for NCDs.

Crisil notes that while banks will still be a major source of funds for NBFCs, the bond market is expected to gain popularity soon, especially as people predict a cut in repo rates.

Despite these changes, growth in assets for NBFCs is expected to slow down to about 15-17% over the next year. This is down from the 23% seen last year. This predicted slowdown, while still better than the average growth of 14% over the past ten years, is influenced by worries about household debt and the quality of loans. Strict rules from regulators focused on customer protection are also causing NBFCs to readjust their operations. The ability of each NBFC to tap into different funding sources will be crucial, especially given the slowdown in bank loans.