Dimas Yusuf, Investment Director at Sucor Asset Management, projected that the Federal Reserve still has a chance to raise the Fed Funds Rate by up to 25 basis points until the end of 2026, highlighting potential impacts on Indonesia’s financial markets.
Fed rate outlook and Treasury yields
Yusuf said rising US Treasury yields draw foreign capital inflows to the US, which tightens global bond markets. He linked these movements to Fed policy, suggesting a persistently high-interest rate environment may continue in the months ahead. The US 10-year Treasury yield closed at 5.28 percent on 7 October, near a 31-day high.
Meanwhile, the US federal funds rate stood at 3.88 percent as of 7 October, also its highest level in 31 days.
Implications for Indonesia’s financial markets
Yusuf noted that an era of elevated US interest rates would influence Indonesia’s financial markets, including the Rupiah exchange rate, equity, and bond markets.
Related: Sucor sees 60% chance of Fed rate hike in September · ADB sees Bank Indonesia holding rate at 5.75% in 2026
Source: Federal Reserve | Data: FRED — St. Louis Fed · U.S. Department of the Treasury
