KUALA LUMPUR, June 30 (Bernama) -- Bursa Malaysia ended the first half of the 2026 trading year on a softer note, following a range-bound trading session as investors remained cautious amid the lack of fresh domestic catalysts. Rakuten Trade Sdn Bhd vice-president of equity research Thong Pak Leng said regional equities finished broadly higher, supported by stronger-than-expected business activity data from China and continued strength in technology stocks. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 1.85 points to 1,664.06 from Monday’s close of 1,665.91. The index opened 1.37 points higher at 1,667.28 and fluctuated between an intraday low of 1,661.80 and a high of 1,669.88 throughout the day. Market breadth was positive, with gainers outnumbering decliners 562 to 415, while 589 counters were unchanged, 1,124 untraded, and 79 suspended.
Federal Reserve’s Tom Barkin warned that inflation remains too high despite early signs of easing. While falling oil prices are helping, persistent pressures from services, consumer spending, and AI-driven investment mean the path back to 2% inflation is still uncertain.
Inflation may be slowing but it is not yet under control.
What’s Happening
- Inflation still elevated
- PCE at 4.1% YoY (highest since April 2023)
- Well above Fed’s 2% target
- Some signs of relief emerging
- Oil and gasoline prices falling after ceasefire
- Tariff and energy pressures starting to ease
- But underlying inflation remains sticky
- Services inflation still high
- Strong consumer spending continues
- New drivers of inflation
- AI infrastructure buildout adding demand pressure
- Businesses still factoring in current inflation when pricing
What’s Really Changing
The inflation story is evolving:
- Before → Energy and war-driven inflation spike
- Now → Broad-based and structural inflation pressures
Even as oil prices fall, inflation is proving more persistent due to:
- Consumption strength
- Pricing behaviour by businesses
- Investment cycles like AI
KeyTakeaway
The Fed is not ready to pivot and may need to stay restrictive longer.
- Rate cuts are unlikely in the near term
- Risk of further rate hikes still on the table
- Inflation is becoming more “sticky” rather than temporary
Falling oil helps, but it’s not enough to bring inflation back to 2%
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