In May 2025, the 10-year U.S. Treasury yield rose from 4.22% to 4.60% by May 21, before easing to 4.40%
at month-end, driven by concerns over President Trump’s budget proposal projecting a $3.3 trillion debt
increase. Persistent services inflation and a tight labor market fueled expectations of prolonged high rates,
despite April CPI easing to 2.3% YoY and core CPI to 2.77%. Goods prices edged higher, reflecting lingering
risks. The FED held rates steady at 4.25%–4.50% on May 7 and signaled caution amid fiscal and policy
uncertainties. Odds of a June rate cut dropped to 4.6%. Indonesia recorded 0.37% deflation MoM and 1.60%
inflation YoY in May, mainly due to falling food and tobacco prices, while core inflation fell to 2.40% YoY.
Bank Indonesia cut the BI-Rate by 25 bps to 5.50% on May 21, citing stable inflation and rupiah strength.
The 10-year bond yield peaked at 6.901% mid-month before settling at 6.825%, reflecting global market
swings. Sukuk issuance rose to IDR 1.0 trillion, bringing the 2025 total to IDR 13.4 trillion, while corporate
bond issuance dropped 38% YoY to IDR 2.8 trillion—still above maturities, signaling continued investor
confidence.