KUALA LUMPUR, July 29 (Bernama) -- Bursa Malaysia rebounded to close higher on Wednesday on selective buying of defensive stocks after a volatile trading session. IPPFA Sdn Bhd director of investment strategy and country economist Mohd Sedek Jantan said consumer products and services stocks lifted the key index higher, overcoming lingering geopolitical concerns. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 3.08 points to 1,715.56 from yesterday’s close of 1,712.48. The benchmark index, which opened 1.91 points higher at 1,714.39, moved between 1,710.79 and 1,720.59 during the day’s trading. In the broader market, gainers outstripped decliners 550 to 476, while 612 counters were unchanged, 1,129 untraded, and 48 suspended. Turnover rose to 2.96 billion units valued at RM2.48 billion from 2.94 billion units valued at RM2.56 billion on Tuesday.
The US Federal Reserve’s paper losses have crossed the US$200 billion (RM844 billion) mark this week, according to data released on Thursday. As of Wednesday, the Fed's earnings remittance to the Treasury Department stood at negative US$201.2 billion, reflecting significant financial strain due to the Fed’s high-interest rate policy aimed at curbing inflation.
This figure represents a deferred asset, an accounting measure that the Fed must clear before resuming excess earnings transfers to the Treasury. Despite the growing losses, Fed officials have emphasized that these paper losses do not impair their ability to conduct monetary policy.
The Fed’s losses stem from the high interest payments it has made to banks and money funds to manage short-term rates. This situation worsened as the Fed aggressively raised rates between March 2022 and July 2023, pushing the interest rate target from near zero to between 5.25% and 5.5%.
In 2023, the Fed faced record losses, with total payouts reaching US$176.8 billion to banks and US$104.3 billion via its reverse repo facility, while earning US$163.8 billion in bond interest. Although a recent half percentage point rate cut may slow the pace of these losses, the Fed still needs to cover its deferred asset before resuming profit remittance to the Treasury, a process that could take years.
While the Fed has largely avoided political criticism for its financial situation, some former central bankers are surprised by the lack of political attention thus far.
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