Fixed Income Update 20 Nov 2025
KBVS WEEKLY FIXED INCOME UPDATE
Thursday, 20 November 2025
Fed Outlook Clouded, BI Defends Rupiah
The recent U.S. government shutdown has disrupted economic activity, delayed critical data releases, and caused a permanent loss of output, leaving the Fed with reduced visibility at a time when inflation remains elevated. At the same time, political tensions surrounding potential replacements for Fed Chair Jerome Powell have added further uncertainty to the policy outlook. These factors have led markets to scale back expectations for a December rate cut, reinforced by the mixed views among Fed officials on the appropriate path for policy. U.S. Treasury yields have inched higher over the past week, reflecting growing expectations that interest rates will remain elevated for longer until economic clarity and leadership stability improve.
Bank Indonesia kept its policy rate at 4.75% to stabilize the Rupiah amid ongoing depreciation and concerns over the current account deficit. Overall, the fixed-income market showed a mildly bullish tone during 13–19 November 2025, although currency pressures remain a key risk. Despite foreign net selling of government bonds, equity inflows remained positive. Government bond yields declined across most tenors, supported by stable demand and a generally improving risk perception. Corporate bond yields also fell across most ratings and maturities, signaling stronger market sentiment. Meanwhile, SRBI and SVBI auctions recorded slightly higher yields, with demand concentrated in longer SRBI tenors and very short SVBI tenors.
Regards,
KBVS Research Team