{
    "success": true,
    "data": {
        "id": 1734904,
        "msgid": "us-inflation-data-to-determine-fed-interest-rates-rupiah-under-pressure-1778608523",
        "date": "2026-05-12 19:39:00",
        "title": "US Inflation Data to Determine Fed Interest Rates, Rupiah Under Pressure",
        "author": "Erlangga Djumena",
        "source": "KOMPAS",
        "tags": "",
        "topic": "Finance",
        "summary": "The United States is set to release its April Consumer Price Index (CPI) data on Tuesday, which will serve as a key indicator for the Federal Reserve's decision on potential interest rate cuts or maintaining high rates. If inflation exceeds expectations at 3.7% or higher, the US dollar could strengthen, exerting further pressure on the Indonesian rupiah as investors shift capital from emerging markets like Indonesia back to the US. Elevated inflation, partly driven by the US-Israel-Iran conflict pushing up oil prices, may delay rate reductions until 2027 and pose political risks for President Donald Trump ahead of midterm elections.",
        "content": "<p>Jakarta - The United States will announce its April US inflation\ndata, or Consumer Price Index (CPI), on Tuesday (12\/5\/2026) local\ntime.<\/p>\n<p>This report is crucial as it serves as the primary reference for the\nUS central bank, the Federal Reserve (The Fed), in determining whether\nthere will be a cut in the benchmark interest rate or if it will remain\nat high levels for longer.<\/p>\n<p>If the inflation results are higher than expected or above 3.7 per\ncent, the US dollar is likely to strengthen, adding further pressure on\nthe rupiah exchange rate. This is because higher interest rates will be\nmore attractive to investors.<\/p>\n<p>Foreign capital will be pulled from emerging markets such as\nIndonesia to be moved back to the US.<\/p>\n<p>For context, the market expects annual inflation to be at 3.7 per\ncent or higher than the previous 3.3 per cent.<\/p>\n<p>This expectation would mark the largest annual inflation increase in\nmore than 2.5 years.<\/p>\n<p>Meanwhile, core inflation (core CPI) is expected to be at 2.7 per\ncent annually.<\/p>\n<p>Quoted from Reuters, high inflation conditions are likely to make The\nFed maintain interest rates for longer.<\/p>\n<p>The Consumer Price Index report from the Department of Labor is also\nexpected to show an acceleration in monthly inflation rates.<\/p>\n<p>The US-Israel war with Iran has driven oil prices higher, which is\ndirectly reflected in rising costs for petrol, diesel, and jet fuel.<\/p>\n<p>Economists believe the second-round effects will be felt in the\ncoming months.<\/p>\n<p>Financial markets expect the US central bank to keep interest rates\nunchanged until 2027.<\/p>\n<p>Consecutive high inflation figures will increase political risks for\nPresident Donald Trump and his Republican Party ahead of the November\nmidterm elections.<\/p>\n<p>Trump won re-election in 2024 largely due to his promise to reduce\ninflation.<\/p>",
        "url": "https:\/\/jawawa.id\/newsitem\/us-inflation-data-to-determine-fed-interest-rates-rupiah-under-pressure-1778608523",
        "image": ""
    },
    "sponsor": "Okusi Associates",
    "sponsor_url": "https:\/\/okusiassociates.com"
}