Fixed Income Update 13 Feb 2025
KBVS WEEKLY FIXED INCOME UPDATE
Thursday, 13 February 2025
EFFICI-ENT (or END?)
Trump’s statements have once again fueled risk-off sentiment in global financial markets, particularly concerning the following issues:
- The implementation of a 25% tariff on steel and aluminum imports,
- His stance on the ownership of the Gaza Strip,
- And Federal budget efficiency and at the same time, Trump's efficiency-driven policies have prompted a significant number of federal employees to resign.
The risk-off sentiment in global markets, leading to a heightened demand for safe-haven assets, reflected in the continued rise in gold prices, which have increased by 0.88% WoW and 44.40% YoY.
Concerns over budget efficiency and its economic impact are also crucial for Indonesia. While on one hand, the budget is expected to be allocated to the MBG program to stimulate consumer purchasing power, there are also significant negative consequences. One of the major concerns is layoffs, which could, in turn, lead to a decline in purchasing power and hinder economic growth in the longer-term.
Regards,
KBVS Research Team