Research preview

The Reserve Bank of India is expected to lift its policy rate by 25 basis points in October, ending a three‑year pause. For quantitative traders, the event offers a natural laboratory to test high‑dimensional regression and machine‑learning techniques that blend macro‑economic data, market microstructure, and sentiment signals. This article shows how to build, validate, and deploy such models while guarding against over‑fitting and data‑sniffing pitfalls. 1. Framing the Prediction Problem The first step is to define the target variable. In this context the binary outcome “Rate hike in October = 1, otherwise 0” is appropriate....