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...
Inflation Watch: Cooler Data, Hotter Rate Cut Hopes
The May Personal Consumption Expenditures (PCE) report — the Fed’s go-to inflation gauge — is expected to show just 0.1% month-on-month core inflation and 2.6% year-on-year, according to FactSet. That would mark three straight months of soft readings, signaling inflation may be steadily cooling toward the Fed’s 2% target.
Why It Matters
The Fed has hinted that sustained inflation moderation could pave the way for rate cuts as early as September — or possibly sooner if economic risks mount.
Here’s what economists are watching:
Headline PCE: Expected at 2.3% YoY, slightly up from April’s 2.1%.
Core PCE: Expected to stay tame at 2.6% YoY.
Monthly pace: Still soft at 0.1%, suggesting disinflationary momentum is holding.
Fed Sentiment is Softening
Fed officials are starting to lean dovish:
Fed Governor Waller said a July cut is possible if data stays cool.
Vice Chair Bowman echoed openness to summer easing.
Others remain cautious, citing tariff risks — but no sign of tariff-driven inflation yet in the data, per Citigroup.
Market Read:
21% chance of July cut, up from 12.5% last week.
September cut remains the base case.
MoneyMaster Take:
If May PCE lands as forecast, the Fed may finally have its runway for easing.
Tame inflation + rising recession risks = policy shift window opening.
Investors should expect market optimism to build around soft landing narratives.
Investor Playbook:
Growth stocks and rate-sensitive assets (like REITs) could benefit.
Bond yields may soften, making long-duration treasuries more attractive.
If inflation continues to cool, gold and crypto may also rally as real yields compress.
Watchlist:
May PCE Report — 8:30 a.m. EDT Friday.
Jobs data and July Fed meeting guidance in coming weeks.
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