The Fed Indicates Stop Raising Interest Rates, S&P 500 rises 1.9%

The United States stock market S&P 500 closed up +1.9% throughout last week's trading, ending a three-week downward trend. This benchmark index fell nearly 3% on Tuesday due to concerns about an interest rate increase by the Federal Reserve triggered by strong economic data. However, positive comments from the Fed indicating that they may stop raising interest rates this summer helped the market performance. Apart from that, from the employment report, the number of unemployed has decreased, which is a positive indication for the market. Market players have adjusted their outlook for the terminal rate, which is now expected to be at least 5.5%. Nine of the eleven S&P 500 sectors increased, with the largest increase in the Materials sector at +4.02%, and Communication Services at +3.27%.

Indonesia's inflation was 5.47% in February

Indonesia's inflation rose to 5.47% in February 2023, slightly higher than consensus expectations of 5.44%, mainly driven by food prices such as red chilies, rice and shallots. The seasonal pattern of post-holiday deflation was not visible in February this year, thought to be due to anticipation of the fasting month of Rama-dan. Prices may increase further in March, especially for the food and transportation categories, as demand increases ahead of the celebrations. Rice prices may begin to stabilize after the harvest season, but transportation prices are expected to remain high due to increased demand from the upcoming Homecoming season, as well as increased fuel prices (Pertamax).

Ministry of Trade regarding CPO exports

The Ministry of Trade will require palm oil (CPO) exports to be carried out through the commodity futures exchange and this policy will be implemented in the second semester of 2023. According to the Ministry, this policy was taken to improve the CPO trading system, this is because so far there have been differences in data palm oil exports. Apart from that, this policy is to make it easier for the government to determine the balance of CPO commodities.

Key Takeaways:

The United States stock market S&P 500 increased by +1.9%. This increase was influenced by positive comments from the Fed indicating that they could stop increasing interest rates this summer. Apart from that, from the employment report, the number of unemployed has decreased, which is a positive indication for the market. Market players have adjusted their outlook for the terminal rate, which is now expected to be at least 5.5%.

For the domestic economy, Indonesia's inflation rose to 5.47% in February, slightly higher than consensus expectations, mainly driven by food prices such as red chilies, rice and shallots. Market players predict prices may increase further in March, especially in the food and transportation categories, driven by the upcoming Ram-adan and Mudik seasons. In other economic news, the Ministry of Trade will require palm oil (CPO) exports to be carried out through the commodity futures exchange and this policy will be implemented in the second semester of 2023. This is being implemented to increase recording on the CPO trading system.

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