In December 2024, the 10-Year US Treasury yield trended upward, starting at 4.19% and ending at 4.57%,
driven by the FED’s revised PCE inflation target from 2.1% to 2.5% for 2025 and adjusted Federal Funds
Rate expectations. The FED cut rates by 25bps to 4.25%-4.50% on December 19th, projecting a median rate
of 3.9% by end-2025. Indonesia’s 10-Year government bond yield similarly rose from 6.85% to 6.97%,
reflecting global market uncertainty and higher U.S. rate expectations. Bank Indonesia maintained the BI
Rate at 6.00% during its December 17-18th meeting, focusing on currency stability amid external pressures.
Indonesia’s inflation increased to 0.44% MoM and 1.57% YoY, primarily driven by food, beverages, and
tobacco, while core inflation remained stable at 2.26% YoY. Corporate bond issuance grew 145.5% YoY to
IDR 13.0 trillion, falling short of maturities of IDR 14.1 trillion and declining 13.5% MoM. Sukuk issuance
surged 301.4% YoY to IDR 2.8 trillion, bringing 2024’s total to IDR 19.5 trillion against maturities of IDR 14.3
trillion. These movements reflect the interplay of global monetary policies, domestic economic conditions,
and market sentiment, particularly influenced by Trump’s re-election and its implications for fiscal policy.