English
Bahasa
Selected Investment Recommendations from BNI AM and The Fed's 2023 Interest Rate Forecast
Sabtu, 05 Agustus 2023
Bisnis.com, JAKARTA - The BNI Asset Management (BNI AM) investment manager revealed recommendations for suitable choices for investors in line with predictions of the interest rate policy direction of the US Federal Reserve or The Fed until the end of 2023. BNI Investment Director AM Putut Endro Andanawarih with the expectation The Fed will hold interest rates, according to him, investors can take advantage of attractive investment opportunities in fixed income mutual funds and equity funds. "The Indonesian bond market still looks attractive, one of which is shown from the movement in the 10-year tenor Indonesian bond yield which is still relatively attractive compared to Asia, even though it has decreased from 6.9 percent to 6.25 percent throughout 2023," he said in an official statement received by Bisnis, quoted on Saturday, (5/8/2023). This makes Indonesia still has the potential to get additional capital inflows with more attractive yields.
Apart from that, according to him, in allocating investment assets, of course, investors need to take into account the risk profile. "If investors have a moderate-defensive risk profile, then fixed income mutual funds are still attractive as investment allocations. However, for investors who have a more aggressive risk profile, equity funds still have the potential to be an option," he explained.
This choice is in line with the Federal Open Market Committee (FOMC) meeting on 25-26 July 2023. At that time, the Fed agreed to raise interest rates by 25 bps to 5.25-5.5 percent. Thus, the Fed Funds Rate (FFR) has increased 11 times with a total increase of 525 bps since March 2022. However, the relatively varied US macroeconomic data triggered uncertainty in global markets whether The Fed would again raise interest rates by 25 bps. on the FOMC next September or will be put on hold. He said the Fed would still look at economic indicators until the rest of 2023, if inflation continued to subside in line with the Fed's target, the Fed would hold interest rates at the current level of 5.25 - 5.5 percent and potentially lower the benchmark interest rate. . On the other hand, according to him, if outside estimates, important economic indicators such as inflation are still high and indicators for consumption and the US labor market are still quite aggressive, then the Fed will raise interest rates again at the upcoming FOMC in September 2023. "Nevertheless, we see little chance The Fed is to raise interest rates again in September 2023 and will tend to hold interest rates at the current level considering that US inflation has fallen to 3 percent, although it still has not reached the Fed's target of 2 percent," Putut said.
