- Excerpts from the Jackson Hole Conference show that the Fed is more likely than not to start cutting the FFR in the next FOMC meeting, bolstering sentiment in risky markets as USD liquidity is widely anticipated to improve.
- However, the Fed may execute its rate-cut campaign gradually, given the risk of returning inflation that may arise from the fiscal cycle and the commodity price channel.
- The ongoing rally in the domestic market opens up space for BI to adjust its policy rate, but the central bank may remain prudent as a marked improvement in the Rupiah’s fundamentals remain scant.
