KUALA LUMPUR, Dec 5 (Bernama) -- Bursa Malaysia closed lower on Friday amid mixed regional market performance as investors turned cautious over a possible rate hike by the Bank of Japan (BOJ) and upcoming US economic data that may influence the Federal Reserve’s (Fed) interest rate decision next week. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) pared most earlier losses to settle 4.55 points easier, or 0.28 per cent, to 1,616.52 from Thursday’s close of 1,621.07. The benchmark index, which opened 0.37 of-a-point lower at 1,620.70, moved between 1,609.67 and 1,621.25 throughout the day. The broader market was negative, with decliners outpacing advancers 604 to 439. A total of 550 counters were unchanged, 1,151 untraded, and 18 suspended. Turnover declined to 3.17 billion units worth RM2.24 billion from 4.48 billion units worth RM2.75 billion yesterday. Rakuten Trade Sdn Bhd vice-presiden...
US consumer spending, a key driver of the economy, grew by 0.4% in November, following a revised 0.3% gain in October, reflecting the economy’s resilience. This solid spending trend supported the Federal Reserve’s decision to adjust its outlook, projecting only two rate cuts in 2025, down from four anticipated three months ago.
Economic Highlights:
- Consumer spending, representing over two-thirds of US economic activity, continues to underpin the economy, which grew at an annualized 3.1% rate in Q3.
- The Atlanta Federal Reserve forecasts Q4 GDP growth at 3.2%, reflecting a slight deceleration from earlier quarters.
- Fed Chair Jerome Powell commended the economy’s performance, stating it has been “remarkable.”
Inflation Trends:
- The PCE price index, a key inflation measure, rose 0.1% in November, compared to 0.2% in October.
- On a yearly basis, the PCE index increased 2.4%, with core inflation holding steady at 2.8%.
Factors Driving Spending:
- Strong labor market: Robust wage growth and low layoffs continue to support household purchasing power.
- Wealth effects: Rising home and stock market values buoy household balance sheets.
- Economists caution that low-income households face financial strain despite overall positive trends.
Fed’s Response:
- The Fed cut its policy rate by 25 basis points this week to a range of 4.25%-4.50%, citing economic strength.
- Concerns remain over potential inflationary pressures stemming from President-elect Donald Trump’s incoming policies, including proposed tariffs, tax cuts, and deportation plans.
While consumer spending remains robust, the economic landscape suggests uneven benefits across income groups. The Fed remains focused on sustaining growth while addressing inflationary risks.
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