Fixed Income Update 24 Jul 2025
KBVS WEEKLY FIXED INCOME UPDATE
Thursday, 24 July 2025
Donald Trump vs Jerome Powell
The standoff between Donald Trump and Fed Chair Jerome Powell highlights one of the most high-profile tests of central bank independence in recent decades. Trump repeatedly criticized Powell for raising interest rates, which he believed hindered economic growth, and even contemplated firing him in 2025. Powell, however, maintained composure, arguing a data-driven approach focused on inflation and employment, and resisted political pressure. Public confidence in the Fed became increasingly polarized along party lines, with Republicans showing more support than Democrats.
As of July 2025, the market expects a likely Fed rate cut by September, supported by a 2.7% rise in CPI and 2.9% core inflation in June. Powell’s resistance to early cuts and insistence on more data reinforces the Fed’s cautious stance amid political and economic pressures.
The Indonesia–EU Comprehensive Economic Partnership Agreement (IEU CEPA) has entered its final stage. The draft legal text is expected to be completed by September 2025, with full implementation projected in early 2027 after all EU Member States ratify the deal. The agreement will liberalize around 80 percent of Indonesia’s exports to the EU, especially apparel, footwear, palm oil, fisheries, and automotive components.
Regards,
KBVS Research Team