KUALA LUMPUR, April 23 (Bernama) -- Bursa Malaysia rebounded from yesterday’s downbeat performance to end at its intraday high today, driven by bargain hunting, particularly in technology, energy, construction, and consumer stocks. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 14.94 points or 1.01 per cent to 1,501.19 from Tuesday’s close of 1,486.25. The benchmark index opened 11.11 points higher at 1,497.36 and hit a low of 1,493.26 in the mid-afternoon session before climbing steadily upwards towards closing. Market breadth was positive, with advancers thumping decliners 717 to 264, while 403 counters were unchanged, 1,021 untraded, and 11 suspended. Turnover slipped to 2.99 billion units valued at RM2.08 billion against Tuesday’s 3.43 billion units valued at RM1.66 billion.
The Dilemma Facing the Federal Reserve
Growth Threat: Tariffs risk dragging the economy into a recession by weakening hiring and spending.
Inflation Risk: At the same time, tariffs are expected to raise prices, particularly for imported goods and materials, complicating any decision to cut rates.
Fed Chair Jerome Powell now faces one of the toughest challenges in decades—balancing rising inflation against slowing growth.
Why the Fed Can’t Win Either Way
Cut rates too soon? Could sustain or worsen inflation.
Wait too long? Risks deeper economic slowdown and rising unemployment.
The Fed’s dual mandate—price stability and maximum employment—is under unprecedented strain.
Investor Expectations vs. Fed Reality
Markets expect rate cuts later this year to cushion economic damage.
However, Fed officials may wait for clearer signs of a weakening labor market before acting.
Powell recently said there’s “no hurry” to cut rates; next Fed meeting is May 6–7.
Broader Concerns from Business Leaders
CEOs like Elias Sabo (Compass Diversified) are preparing for sharp sales declines, cutting costs, and freezing hiring.
High-income consumer spending could also pull back if stock prices remain depressed.
Firms are passing through tariff-induced price hikes, increasing risk of sticky inflation.
Structural Risks for the Fed
Tariff confusion: Is the goal to negotiate and lower them—or keep them high to push reshoring?
Inflation tailwinds: Price hikes could linger, similar to post-pandemic surges.
Limited Fed tools: Monetary easing has limited impact on trade-policy-driven slowdowns.
Bond Market Warnings
10-year Treasury yields rose 0.27 percentage points this week to 4.26%, defying usual flight-to-safety patterns.
Analysts worry about a global pullback from U.S. assets and tariff-fueled inflation.
Even rate-sensitive sectors like housing and autos may not benefit from cuts due to tariff drag.
Bottom Line The Federal Reserve is navigating the most complex policy environment in decades. Caught between a potential recession and tariff-induced inflation, Powell’s choices could shape not only the near-term economy but also the credibility of U.S. monetary policy.
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