KUALA LUMPUR, July 30 (Bernama) -- Bursa Malaysia's key index closed at an intraday high today, supported by continued buying interest even as renewed geopolitical tensions and a weaker overnight lead from Wall Street following the US Federal Reserve's (Fed) decision to stand pat on interest rates weighed on broader sentiment. The Fed has decided to hold rates steady for the fifth consecutive meeting, with the Federal Funds Rate unchanged between 3.50 per cent and 3.75 per cent. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 4.84 points to 1,720.40 from yesterday’s close of 1,715.56. The benchmark index, which opened 1.14 points lower at 1,714.42, hit its lowest level of 1,710.69 in early trade before gaining momentum for the rest of the day. However, the broader market was negative with losers outpacing gainers 581 to 411, while 612 counters were unchanged, 1,173 untraded, and 87 suspended. Turnover declined to 2.49 billion units valued at RM2.25 billion from ...
Key Expectations:
Non-farm payrolls: +135,000 (vs +151,000 in February)
Unemployment rate: Steady at 4.1%
Range of estimates: 50,000 to 185,000 jobs
Federal jobs cut: Up to 25,000 in March alone
Key Drivers of the Slowdown:
Mass federal layoffs under the Department of Government Efficiency (DOGE), with Elon Musk’s cost-cutting campaign facing legal and administrative delays.
Tariff Shock:
President Trump’s sweeping 10% universal tariff plus targeted duties on 60 nations has raised the effective US tariff rate to a 100-year high.
Businesses are pulling back on hiring, delaying capital expenditure, and preparing for margin pressures.
Consumer Retrenchment:
A wave of pre-tariff stockpiling in late 2024 has reversed, with spending slowing in Q1 2025.
Retail and manufacturing payrolls expected to face pressure in April data.
Economic Risks Rising:
GDP: Q1 growth tracking below 0.5% annualized; recession odds increasing.
Inflation & Unemployment: Both expected to rise in the coming quarters.
Fed Outlook:
Currently holding rates at 4.25%-4.50%
Two rate cuts projected for 2025, but more may follow if slowdown worsens
Tariffs complicate rate policy due to potential inflationary spike + growth slump (stagflation risk)
Analyst Commentary:
“We’ve gone from a strong economy to chaos. Businesses are resetting, consumers are pulling back, and the Fed is walking a tightrope.”– Brian Bethune, Boston College
“This isn’t just about trade. This is about economic survival for businesses facing inflation and uncertainty.”– Lydia Boussour, EY-Parthenon
“The Fed may have to cut more than expected, but it will be a messy process.”– Ernie Tedeschi, Yale Budget Lab
What to Watch:
Friday’s jobs data – for early signs of tariff impact
April and May jobs reports – to confirm trajectory
Retail & manufacturing hiring – bellwethers of consumer demand and supply chain health
Federal Reserve tone shift – as dual mandate (jobs + inflation) enters conflict
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