KUALA LUMPUR, March 28 (Bernama) -- Bursa Malaysia closed lower today on profit-taking after a strong three-day rally, and investor sentiment was further shaken in the late afternoon session following news of an earthquake in Myanmar with tremors felt in neighbouring Thailand, said Rakuten Trade Sdn Bhd equity research vice-president Thong Pak Leng. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) slid 1.44 per cent or 22.08 points to 1,513.65, its intraday low, from Thursday’s close of 1,535.73. The benchmark index opened 4.16 points lower at 1,531.57 and hit an intraday high of 1,533.52 during the midday session. On the broader market, decliners outpaced gainers 563 to 395, while 408 counters were unchanged, 1,106 untraded, and 133 suspended. Turnover slipped to 2.25 billion units valued at RM2.13 billion from 2.52 billion units worth RM2.41 billion on Thursday.
Key Takeaways:
Bostic's Revised View on Rate Cuts: Federal Reserve Bank of Atlanta President Raphael Bostic now forecasts only one rate cut this year, down from two, due to the persistent inflationary pressures caused by ongoing tariff hikes.
Inflation Outlook: Bostic believes inflation will be bumpy and will not reach the Fed's 2% target until early 2027—a delay from previous expectations. He also linked the impact of tariffs as a contributing factor to the slower progress toward this target.
GDP and Employment Forecasts: The Fed projects U.S. GDP to grow by 1.8% this year, slightly down from a previous estimate of 2.1%. However, Bostic expects the unemployment rate to remain strong at 4.2% to 4.3% by year-end.
Impact of Tariffs: Bostic expressed concerns that the increased tariffs could drive inflation further, posing risks to employment if consumer sentiment declines or layoffs rise. He emphasized the unpredictability of policy changes under the Trump administration and their impact on economic forecasting.
Fed’s Strategy on Rates: While Fed Chair Jerome Powell referred to the inflationary effects of tariffs as transitory, Bostic was more cautious and avoided the term, acknowledging the sustained impact of recent price growth.
Market Sentiment: As markets adjust to shifting tariff policies, Bostic's stance highlights a more cautious outlook, with tariff-driven inflation and economic uncertainty driving the Fed to tread carefully on rate decisions. Traders and investors should keep an eye on the evolving economic data, especially related to inflation and tariff impacts, as these factors will likely shape future Fed actions.
Takeaway: Investors, especially in sectors affected by tariffs, should brace for potential volatility as the Fed adapts its policies to the evolving economic situation. The uncertainty surrounding tariff policies and inflation may keep the markets on edge, making it crucial for investors to stay informed on key policy updates.
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