Bank Indonesia Estimates The Fed Will Cut Interest Rates in the Second Half of 2024

THE FED - JAKARTA. Bank Indonesia (BI) predicts that the central bank interest rate of the United States (US) or The Fed will start to cut its interest rate in the second half of 2024.

This was directly conveyed by the Senior Deputy Governor of Bank Indonesia, Destry Damayanti at the Economic Outlook 2024 event, Wednesday (7/2).

"The global interest rate in this case we usually use the Fed Fund Rate, we predict it will decrease. If it's BI, we predict that in the second semester it will experience a decrease," said Destry.

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According to her, market players even predicted a faster benchmark interest rate decrease. Market players predicted the decrease would occur in March, but US inflation has not yet fallen to the target level of 2%.

"Initially predicted in March but US economic data is still strong so they are afraid of inflation issues because their inflation has not yet fallen to their target level of 2%," she said.

Because of this, The Fed will not yet lower its interest rate in the near future.

"Because inflation is still relatively high above their target so they will still maintain high interest rates and of course this will push the yield from American bonds to remain at a high level," explained Destry.