The Fed’s target is to contain inflation even if the economy slows sharply, according to Jerome Powell’s statement in front of Congress. Wall Street moved mixed before closing slightly lower. The Fed will continue to be Hawkish until there is a strong proof that inflation has declined, supported by the US’s solid labor market. The US May unemployment rate was 3.6%, the lowest in two years. Meanwhile, energy stocks are depressed as oil prices decline amid the fear that economic slowdown disturb the demand for fuel. The August crude contract WTI fell more than 3% to USD106.19/barrel, and Brent fell 2.5% to USD111.74/barrel.

BI 7DRRR maintained at 3.50% until there is an inflationary pressure. BI revised up the inflation ceiling target to 4.2% YoY (Vs. Prev. 4% YoY). Currently, inflation in May is at 3.55% YoY (2.58% MoM), better than other countries, making the BI 7DRRR in June projected to remain at 3.50%. Meanwhile, BI may potentially continue the liquidation normalisation policy through increasing GWM in July and September to 7% and 9% respectively. Yesterday, JCI fell by 60 points to 6,984, with foreign net sell of IDR120 billion. NHKSI Research projects JCI to move upward (rebound) in the range of 6,950-7,150.

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