The Reserve Bank of India has cut the benchmark policy rate by 25 basis points (one basis point is one-hundredth of a percentage point) in line with the expectations of the market and economists. Should an average household be happy or sad? An average household catches cues from newspaper headlines and worries when the central bank holds interest rates high for very long without really knowing why. But often the interest of the household is different from that of the corporate sector or banks. This is how it works and why we don’t need to celebrate a rate cut just yet.