Fixed Income Update 04 Sep 2025
KBVS WEEKLY FIXED INCOME UPDATE
Thursday, 4 September 2025
Assessing Domestic Politics
Expectations for a Federal Reserve rate cut are gaining momentum, with the Fed increasingly seen as likely to adopt a pro-cyclical policy stance to support the economy. In addition, this week’s release of U.S. labor market data—particularly nonfarm payrolls and the unemployment rate—will be closely watched ahead of the FOMC meeting scheduled for 17 Sep ‘25.
Domestically, escalating political developments have shifted the Rupiah toward depreciation while SUN yields have reversed higher this week. Further political dynamics are expected to remain in focus in the coming days. At the same time, ongoing discussions on burden-sharing between Bank Indonesia and the Ministry of Finance (MOF) to finance President-elect Prabowo’s Asta Cita policy agenda have raised concerns regarding the perceived independence of the central bank.
Regards,
KBVS Research Team