Fixed Income Update 30 Oct 2025
KBVS WEEKLY FIXED INCOME UPDATE
Thursday, 30 October 2025
Global Balancing Act and BI Focuses on Productive Growth
The U.S. Federal Reserve delivered a 25 bps rate cut to 3.75%–4.00%, but Chair Jerome Powell cautioned against assuming another move in December. The Fed remains divided, and markets now expect rates to stay steady until at least March 2026, signaling a cautious, data-driven stance amid persistent inflation risks. Meanwhile, President Trump concluded his Japan visit, securing a USD550 bn investment package and signing a critical minerals pact with PM Sanae Takaichi, strengthening industrial and security ties. The focus now shifts to the APEC Summit in Seoul, where Trump’s meeting with President Xi Jinping could trigger significant market volatility depending on trade outcomes.
At home, Bank Indonesia maintained its policy rate but introduced new credit incentives to boost lending in agriculture, downstreaming, and MSMEs, signaling targeted support within a cautious framework. Domestically, yields on SRBI declined, reflecting solid liquidity demand, while SUN yields edged higher, suggesting domestic pressures on longer-term debt despite global easing sentiment.
Overall, markets remain guardedly optimistic, balancing Fed caution, geopolitical uncertainty, and Indonesia’s focused growth measures.
Regards,
KBVS Research Team