Bond’s Danger Signal
Monday, March 22, 2021
Inflation in the US, which might trigger an interest rate hike by the Fed and reduced liquidity injection, is becoming the biggest fear of emerging markets, including Indonesia. Investor’s money which has been anchored here might just return home, in great numbers and fast.
SLOWLY but surely, the foreign capital parked in rupiah-denominated government securities are leaking out. The trigger is persistent volatility in the global bond market. Markets are anticipating inflation in the United States, which will have widespread effects around the globe.
The US economy, which just received a stimulus injection of US$1.9 trillion, will grow rapidly this year. The Federal Reserve had even projected a 6.5 percent grow
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