In March 2025, the 10-year US Treasury yield rose from 4.16% to 4.21%, driven by renewed global trade
tensions and rising inflation expectations. US tariffs on Canadian and Mexican goods, followed by Trump’s
announcement of broad reciprocal tariffs starting April 9, heightened fears of a trade war. These
developments fueled cost-push inflation concerns and delayed Fed rate cut bets, despite softer February
inflation data—headline CPI eased to 2.8% YoY and core CPI to 3.1%, both below expectations. The Fed
kept rates steady at 4.25%–4.50%, maintained its 2025 median projection at 3.9%, and revised GDP growth
down to 1.7%, citing elevated inflation and rising macroeconomic risks. In Indonesia, March inflation reached
1.03% YoY and 1.65% MoM, driven by housing and energy costs, while core inflation stood at 2.48%. The
BI-Rate was held at 5.75% to preserve Rupiah stability and manage inflation within the 2.5±1% target.
Indonesia’s 10-year bond yield mirrored US trends, climbing from 6.87% to a peak of 7.19% before easing
to 6.98%, amid protests over fiscal cuts and rising political uncertainty. March sukuk issuance surged to IDR
6.7 trillion, bringing the 2025 total to IDR 11.7 trillion, far exceeding maturities of IDR 2.5 trillion. Meanwhile,
corporate bond issuance rose 73.1% YoY to IDR 17.6 trillion, outpacing IDR 14.7 trillion in maturities,
signaling continued momentum in the domestic debt market.