JAKARTA. The Fed has ended the era of low interest rate, as this US central bank increased the benchmark interest rate to 0,5%-0.75%, Thursday (15/12). Market participants have likely anticipated The Fed’s decision. Therefore, in average the indexes of Asia’s stock exchanges only shrank less than by 1%, although Hang Seng index corrected by almost 2%. However, markets need to anticipate the subsequent plan of The Fed to increase the interest rate up to three times in 2017. Lack of anticipation will destabilize Indonesia’s financial market. Let alone, the President Trump’s economic program is predicted to cause a higher inflation rate in the US (United States of America). During the campaign period, Trump promised to increase infrastructure and military budgets, as well as provide a large scale of fiscal stimulus.
Market monitors The Fed policy in the next year
JAKARTA. The Fed has ended the era of low interest rate, as this US central bank increased the benchmark interest rate to 0,5%-0.75%, Thursday (15/12). Market participants have likely anticipated The Fed’s decision. Therefore, in average the indexes of Asia’s stock exchanges only shrank less than by 1%, although Hang Seng index corrected by almost 2%. However, markets need to anticipate the subsequent plan of The Fed to increase the interest rate up to three times in 2017. Lack of anticipation will destabilize Indonesia’s financial market. Let alone, the President Trump’s economic program is predicted to cause a higher inflation rate in the US (United States of America). During the campaign period, Trump promised to increase infrastructure and military budgets, as well as provide a large scale of fiscal stimulus.