- The Federal Reserve has left its policy rate unchanged at 4.25-4.50%, maintaining a wait-and-see stance amidst elevated risks to both sides of its dual mandate.
- The threat tariffs pose to US economic growth appears to be more credible than their inflationary impact, leading to the expectation that the Fed will still cut the FFR later in the year.
- Anaemic domestic demand and the need to shield local industries through a managed depreciation may encourage Bank Indonesia to maintain its dovish policy bias.
