AMERICA is being hit by inflation. It is a concern that the Fed will postpone cutting the Fed Funds Rate in June 2024.
“This is based on the US inflation data that came out yesterday,” said Associate Director of Research and Investment Pilarmas Investindo Sekuritas Indonesia Maximilianus Nico Demus, Thursday (11/4).
In fact, the probability of the Fed reducing interest rates in June is only around 16.2%, then in July it is only around 29.7%.
With the reduced potential for a reduction in the Fed’s interest rate in June, this will lead to a decline in the stock index and an increase in bond yields, which is also supported by an increase in the strengthening of the US Dollar currency.
“This is what makes us pay attention to the global index experiencing a correction in today’s trading. The Rupiah has great potential to reach the level of 15,900 per US Dollar later,” said Nico.
The possibility of the Fed lowering interest rates actually appears to be greatest in September, where it is around 44%.
Also read: Today’s Rupiah Strengthens at IDR 15,653 per US Dollar
Then there is also the possibility that a decrease in the Fed Funds Rate will occur in December with a probability of 51%.
US Change in nonfarm Payrolls data also rose which makes employment data very strong, making inflation much more stable at its current level.
“So far it is still in line with our predictions that the nearest rate of decline in US interest rates will only occur one to two times in 2024 with a range of 25 to 50 basis points,” said Nico. (Z-8)
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