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Interest rates to halve

May 27, 2023
One minute read

Oil as benchmark, flat
  • Oil prices had a great run in 2021 & 2022….From a negative futures price .. remember that? The oil price went back to a triple digits above 100 dollars for the first time in years.
  • Oil we can say is a benchmark for the inflation which then rocketed up to almost double digits in the US, double digits in the UK & 6% here in Indonesia.
  • But now the oil price is back to down trading around 70 dollars which is roughly where is was five years ago in 2018… which means that inflation & interest rates should do roughly the same 5 years flat correction.

10 year yields 50% too high
  • Our Indonesian 10 year government bond yields are already following this patter & even a bit lower now than the 6.5% they were back in early 2018.
  • But in the US which is key, their 10 year government bond yield is a bit higher now at 3.8%.
  • US 10 year yields should all things being equal now go back down to where they were before & maybe below 3% as inflation comes down further in the next few months.

Short term rates 100% too high
  • Our short term rates here , the BI 7 days repo was at 4.25% in early 2018. It’s now at 6% so about 50% too high & should come back down to where it was before.
  • The US short term T bill (& the Fed) is now at 5% or even slightly above, compared to about 2.4% back in early 2018 so 100% too high!
  • The short term interest rates are too high, way too high in the US & should have a pretty dramatic decline in the next few months which would be… great.
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  • Asjmp
  • English
  • mm
  • Interest rates to halve
  • MLPT 12 months cashflow +700%
  • MDKA operating cashflow negative
  • Sahamplus
  • Home
  • HTUFS
  • 7Steps
  • Model
  • Subscribe
  • SharpfokUS
  • Subcapital
  • US
  • SMBR cashflow steady
  • MPPA cashflow still negative
  • KOBX cashflow still negative