Jakarta. Rupiah weakened against the US dollar on Thursday morning as investors assessed the Federal Reserve’s latest rate cut and Chair Jerome Powell’s cautious remarks on future policy moves.

According to Bloomberg data, the rupiah slipped 12 points, or 0.07 percent, to Rp 16,629 per US dollar as of 10:26 a.m. Jakarta time in the spot market. The currency closed at Rp 16,617 on Wednesday. Meanwhile, the US dollar index fell 0.14 percent to 99.08.

Permata Bank Chief Economist Josua Pardede projected the rupiah to trade within the range of Rp 16,575 to Rp 16,700 per dollar, noting that markets had largely priced in the Federal Open Market Committee (FOMC)’s October policy decision.

“Investors are now focusing on guidance regarding the Fed’s policy direction going forward,” Josua said on Thursday.

The FOMC on Wednesday trimmed the Fed Funds Rate by 25 basis points to a target range of 3.75 – 4 percent from 4 – 4.25 percent. The decision, however, saw some dissent among policymakers with Governor Stephen Miran favoring a larger 50 bps cut, while Kansas City Fed President Jeff Schmid preferred to hold rates steady.

In his post-meeting remarks, Fed Chair Jerome Powell signaled that another rate reduction in December was not guaranteed, citing caution amid signs of a cooling US labor market. He also noted that inflation remained elevated compared to last year, although US economic growth continued at a moderate pace.

“Despite the cautious tone, Powell confirmed that the Fed will end its quantitative tightening program in December 2025,” Josua said.

He added that Powell’s comments tempered market expectations for further easing. “According to the FedWatch tool, the probability of another rate cut in December fell to around 65 percent from 80 percent before the meeting,” Josua said.

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