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...
Key Takeaways
CBO cuts tariff-savings estimate by US$1 trillion, highlighting fiscal strain.
Tariffs now expected to reduce deficits by US$3 trillion over 2025–2035 — less than the US$3.4 trillion cost of Trump’s tax cuts.
Revision reflects lower tariff rates, data updates, and bilateral trade deals.
US deficit remains entrenched at ~US$1.8 trillion, debt on track to break historic records.
Tariff revenue assumptions may change if Trump proceeds with US$2,000 dividend checks.
A Supreme Court ruling against tariff hikes could further weaken revenue outlook.
The US Congressional Budget Office (CBO) has sharply downgraded its estimate of federal budget savings from President Donald Trump’s sweeping tariff hikes, cutting the projected benefit by US$1 trillion and raising fresh questions about America’s long-term borrowing trajectory.
In a Thursday update, the nonpartisan agency said higher customs duties are now expected to reduce cumulative US budget deficits by US$2.5 trillion over 2025–2035 — plus an extra US$500 billion in interest-cost savings. The combined US$3 trillion is far short of the US$4 trillion savings previously projected in August.
Crucially, the new estimate is not enough to offset Trump’s landmark tax-cut law, which the CBO previously warned will add US$3.4 trillion to federal deficits over 2024–2034.
Two-thirds of the downward revision reflects new data, CBO director Philip Swagel said, while recent adjustments to tariff rates—many reduced through bilateral deals—also weighed on the savings estimate.
The US ran a US$1.78 trillion deficit in the fiscal year through September, nearly unchanged from 2024, underscoring the persistent structural gap between spending and revenues. Earlier this year, the CBO warned that federal debt would exceed its post–World War II record by 2029, even before factoring in Trump’s tax and tariff changes.
The agency now estimates that the effective tariff rate sits 14 percentage points above its level a year ago — lower than the 18-point increase projected in August — due to negotiated tariff reductions and policy tweaks aimed at easing voter concerns over rising living costs.
Although tariff revenue is assumed to go directly to the Treasury, Trump has repeatedly floated issuing US$2,000 “tariff dividend” checks to middle- and lower-income households. Many lawmakers oppose the idea, favouring deficit reduction instead.
A Supreme Court move to invalidate broad portions of Trump’s tariff regime would further upend the fiscal outlook, though economists expect the White House would attempt to reinstate similar levies through alternative mechanisms.
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