The Fed to Look at Reviving a Great Recession-era Promise to Keep Interest Rates Low

The yield on the 10-year Indonesian Government Bond increased 4 bps from 28 August 2020 to 6.94% on 4 September 2020. However, the 10-year Indonesian CDS showed a slight decline, closing at 88 bps on 3 September 2020, down 9 bps from a week ago, August 28th. In addition, the Rupiah exchange rate against the USD depreciated by 0.81%, with a value of IDR 14,750 per USD on 4 September 2020, from IDR 14,632 as of 28 August 2020.

Federal Reserve policymakers are looking at reviving a Great Recession-era promise to keep interest rates low until certain conditions are met, in a bid to deliver a more rapid recovery from the recession triggered by the coronavirus pandemic. The policymakers “generally indicated support” for tying rate-setting policy to specific economic outcomes, minutes from the U.S. central bank’s June 9-10 policy meeting showed on Wednesday. “A number” favored a promise to leave rates low until inflation meets or even modestly exceeds the Fed’s 2% goal. (Reuters)

Source: Danareksa Sekuritas Debt Research

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