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...
The Federal Open Market Committee (FOMC) left the federal funds rate unchanged at 4.25% to 4.5%, pointing to ongoing economic uncertainty despite a steady labor market.
Slower Economic Growth
Recent data showed the U.S. economy grew at an annual rate of 3% in Q2, helped by lower imports.
The first half of the year averaged 1.25% growth, a full percentage point weaker than last year.
Gross private investment dropped 15% in Q2, the steepest fall in more than three years.
Tariffs and Inflation
Fed Chair Jerome Powell noted that higher tariffs are starting to affect prices, but their long-term impact on inflation is unclear. He said the effects might be temporary but warned they could also prove more persistent.
Labor Market Remains Resilient
ADP data showed 104,000 private-sector jobs added in July, topping forecasts of 76,000.
Powell said the labor market is "roughly stable," but declines in both worker supply and demand pose potential risks.
Rate Cut Odds Rise
Before the meeting, markets expected no rate changes.
After the decision, traders increased bets on a rate cut in September to 63.7%, up from 57.9%, according to the CME FedWatch tool.
Dissenting Voices
Fed officials Michelle W. Bowman and Christopher J. Waller voted against holding rates steady, preferring a 0.25% cut instead.
Summary: The Fed is taking a cautious stance, balancing slower growth and resilient jobs data against the unknown effects of tariffs. Markets are now watching September closely for a potential rate cut.
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