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 ...
As inflation inches closer to the Fed’s 2% target, San Francisco Fed President Mary Daly believes two rate cuts remain on the table in 2025, despite concerns about recent tariff announcements.
Daly suggested the price impact of Trump’s new tariffs may be muted, as businesses are finding ways to absorb part of the cost or negotiate shared burden structures that prevent full pass-through to consumers.
“Some companies are cutting into their margins instead of passing costs along,” Daly said. “This could prevent a major spike in consumer inflation.”
Key Points for Investors
Two rate cuts likely in 2025, according to Daly
Tariffs may lead to one-off price increases, not long-term inflation
Growth and spending are moderating — but not weakening
Daly: Inflation still on track to hit 2%
Futures pricing shows first cut likely in September
Diverging Views Inside the Fed
While June meeting minutes show a split among policymakers, Daly aligns with the group expecting limited inflation spillover from tariffs.
Meanwhile, St. Louis Fed President Musalem urges caution, saying it’s too early to determine whether tariff inflation will linger or fade.
“We may not see the full impact until Q4 or even early 2026,” Musalem noted.
Investor Takeaway
With Daly downplaying inflation fears and reaffirming the path to easing, the market continues to bet on a September rate cut. For bond traders and equity investors alike, the message is clear: monetary policy is gradually shifting back to support mode, even as tariff noise clouds the macro outlook.
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