MONEY MASTER

 A Careful Approach at Jackson Hole At the Jackson Hole symposium, Federal Reserve Chair Jerome Powell hinted at a likely interest-rate cut in September. But unlike the aggressive easing cycle of 2023, Powell stressed a measured approach, making it clear that investors shouldn’t expect rapid or repeated cuts unless economic conditions worsen. Why the Fed Is Hesitant Labor Market Softness:  Powell noted “curious” signs of weakness despite low unemployment. Both labor supply and demand are slipping, raising concerns of a sudden deterioration. Inflation Risks:  With inflation running close to 3% (above the Fed’s 2% target), several officials remain wary of cutting too soon. Tariff-driven price pressures could persist if businesses continue testing consumer tolerance for higher prices. Split Among Fed Officials:  Some policymakers favor more aggressive easing, while others argue rate cuts are premature given sticky inflation. Powell’s Strategy Powell echoed Fed governor ...

In the midst of global tariff turbulence and uncertain monetary policy, one under-the-radar opportunity could be setting up for a comeback:  Malaysian government bonds . After enduring a wave of foreign outflows last month — totaling  US$676 million (RM2.87 billion)  — Malaysia’s sovereign bond market is now showing early signs of reversal. The catalyst? A  surprise interest rate cut  by Bank Negara Malaysia (BNM), its first in five years. While the move was largely seen as preemptive, BNM made its message clear:  global trade risks are real, and policy needs to respond . President Donald Trump’s newly-imposed  25% tariffs on Malaysian goods  added fuel to the fire. Malaysia’s economy had already logged  three straight quarters of slowing growth . Now, easing monetary policy might be the much-needed lifeline. Why This Matters for Investors BNM’s dovish tone suggests that  more rate cuts could be on the horizon . According to DBS Bank’s C...

Despite Wall Street's bullish momentum, Asian equity markets slipped on Friday as  renewed U.S. tariff threats  triggered caution among investors ahead of the  critical July 9 negotiation deadline . The regional MSCI Asia-Pacific Index declined 0.3%, while Hong Kong’s Hang Seng Index underperformed, sliding 1.4%. Tariff Risk Returns to the Forefront President Trump signaled the possible rollout of  “unilateral tariff letters”  to trading partners starting Friday — a move seen as a pressure tactic to accelerate trade talks. With the 90-day suspension window on April’s tariffs expiring next week, the rhetoric from Washington has taken on a sharper tone. “We are probably going to be sending some letters out… saying what they are going to pay to do business with the U.S.,” Trump stated, raising the stakes for key U.S. trading partners in Asia and Europe. While  U.S. equities extended gains  after a strong June payrolls report, the  Asian markets respo...

The Reserve Bank of New Zealand (RBNZ) released a pessimistic economic outlook on Tuesday, highlighting challenges such as rising unemployment, weakened domestic activity, and delayed business investments due to financial pressures. In its semi-annual Financial Stability Report, the RBNZ pointed to reduced demand due to subdued global growth and high interest rates. Businesses are reporting lower profitability and subdued demand, compounded by cost pressures that are impacting trade. Key takeaways from the report include: Rising Unemployment : Increasing unemployment rates are creating acute financial difficulties for some households, according to the central bank. Economic Contraction : The RBNZ expects that New Zealand's economy shrank in the third quarter, as previous cash rate hikes were implemented to curb demand and reduce inflation. Interest Rate Cuts : Since August, the central bank has cut the official cash rate by 75 basis points, with the goal of supporting demand recove...

The Organisation for Economic Cooperation and Development (OECD) expects global growth to stabilize at 3.2% in both 2024 and 2025, as the impact of central bank rate hikes diminishes and declining inflation supports household incomes . In its latest forecast, the OECD slightly raised its 2024 outlook from 3.1% while keeping 2025 growth unchanged. The OECD highlighted that as inflation continues to fall and interest rate cuts are introduced, consumer spending is likely to benefit, boosting economic activity. If recent declines in oil prices persist, global headline inflation could be 0.5 percentage points lower over the coming year. The US Federal Reserve's interest rate is expected to decrease to 3.5% by the end of 2025, and the European Central Bank could lower rates to 2.25% by then. The US economy is projected to slow from 2.6% growth in 2024 to 1.6% in 2025, while China's growth is expected to decelerate from 4.9% to 4.5% over the same period, due to weak...

Despite the Federal Reserve's half-percentage-point interest rate cut last week, public sentiment about the economy remains uncertain. While lower rates have begun making credit cheaper for households and businesses—leading to reductions in mortgage rates and corporate bond yields —the impact has yet to be fully felt by consumers. The Fed's recent move marks the first in a series of expected rate cuts, aimed at easing credit conditions and potentially improving the financial outlook for Americans. However, it is unclear how quickly this will influence voters' perceptions ahead of the November 5 US presidential election . Inflation has dropped sharply, with the consumer price index (CPI) falling from over 9% in mid-2022 to 2.6% in August 2024. Yet, Americans like Julie Miller from Nevada, one of the battleground states, still face economic pressures. While Miller's daughter struggles to buy a home due to high prices, rising costs at places like Taco Bell have forc...

The euro fell against the dollar on Monday after disappointing business activity reports from the euro zone, which contrasted with steady data from the U.S. The euro's decline extended briefly after U.S. data showed stronger economic resilience, as markets brace for key speeches from Federal Reserve officials later this week. Weakness in the euro zone's economy is reinforcing expectations of further interest rate cuts by the European Central Bank (ECB) . Markets are currently pricing in a 77% chance of a 25 basis point rate cut during the ECB's October meeting. A survey from S&P Global revealed that euro zone business activity sharply contracted in September, with a flatlining services sector and an accelerated downturn in manufacturing. Germany’s economic decline worsened, while France fell back into contraction after a brief boost in August. In contrast, the U.S. showed stable business activity , with S&P Global's U.S. Composite PMI Output Index at 54.4 f...

  Wall Street traders, optimistic that the Federal Reserve (Fed) will achieve a soft landing for the US economy, fueled a rally in riskier assets, driving the S&P 500 to a new all-time high. The index climbed 1.7% , marking its 39th record in 2024 and pushing this year's gains to approximately 20%. Tech stocks led the charge , while more defensive sectors lagged. The Nasdaq 100 rose 2.6% , and small caps in the Russell 2000 gained 2.1% . The rally occurred as traders braced for the quarterly "triple witching" event, which involves the expiration of derivatives contracts tied to stocks, index options, and futures. This could lead to increased market volatility, with US$5.1 trillion set to expire on Friday, coinciding with benchmark index rebalancing. The Fed's decision to cut interest rates by 50 basis points re-ignited hopes that it can stave off a recession. Data released Thursday showing a decline in jobless claims to their lowest level since May bolst...