- The easing pressure on the domestic financial market appears to diminish the immediate necessity for BI to make further adjustments to its policy rate. However, the current calm condition seems to be more influenced by external factors, which may continue to shift given the still-volatile global market.
- The worsening US manufacturing and labour data appear to reduce expectations for the US real policy rate, offering relief for Indonesia and other higher-yielding markets.
- The American households' sensitivity to inflation rather than interest rates may persist in encouraging the Fed to err on the side of policy tightening.
