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The Star
16-05-2025
- Business
- The Star
Ringgit continues to improve ahead of Malaysia's 1Q GDP announcement
KUALA LUMPUR: The ringgit has continued its positive momentum, opening stronger against the US dollar this morning, ahead of Malaysia's first quarter (1Q) 2025 gross domestic product (GDP) announcement today, an analyst said. At 8 am, the local note appreciated to 4.2705/2920 versus the greenback from Thursday's close of 4.2795/2870. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said markets are waiting for Malaysia's 1Q 2025 GDP growth data, with advance estimates of a 4.4 per cent expansion. He noted that the data will be a key factor in Bank Negara Malaysia's (BNM) decision on whether to ease monetary policy, as well as the forecast for GDP growth this year. "As such, we expect ringgit to trade more cautiously today," he told Bernama. Meanwhile, Mohd Afzanizam noted that the US Dollar Index (DXY) was down by 0.16 per cent to 100.87 points, while the United States (US) Producer Price Index (PPI) continued to moderate to 2.4 per cent year-on-year in April after sustaining at 3.4 per cent in February and March. This suggests that inflation in the US will continue to ease and create more room for the US Federal Reserve (Fed) to cut rates this year, he added. "However, Fed chair Jerome Powell's speech at the Thomas Laubach Research Conference in Washington hinted that the inflation trend is likely to be more erratic due to the supply shocks, which have become more frequent and potentially more persistent. "This could mean the Fed is not keen to ease its monetary policy stance in the near term, which would affect the ringgit," he said. At the opening, the ringgit traded mostly higher against a basket of major currencies. It was up against the British pound to 5.6819/7105 from 5.6862/6961 at Thursday's close, and rose vis-a-vis the euro to 4.7800/8040 from 4.7939/8023 yesterday, but edged down versus the Japanese yen to 2.9338/9490 from 2.9326/9379 previously. At the same time, the local note was traded mixed against its ASEAN peers. It climbed versus the Singapore dollar to 3.2931/3102 from 3.2950/3010 yesterday and gained against the Philippine peso to 7.66/7.70 from 7.67/7.69 previously. The ringgit had also strengthened against the Indonesian rupiah at 258.3/259.7 from 258.8/259.4 at the previous close, but fell against the Thai baht to 12.8630/9367 from 12.8198/8488 yesterday. - Bernama
The Sun
16-05-2025
- Business
- The Sun
Ringgit continues to improve ahead of Malaysia's 1Q GDP announcement
KUALA LUMPUR: The ringgit has continued its positive momentum, opening stronger against the US dollar this morning, ahead of Malaysia's first quarter (1Q) 2025 gross domestic product (GDP) announcement today, an analyst said. At 8 am, the local note appreciated to 4.2705/2920 versus the greenback from Thursday's close of 4.2795/2870. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said markets are waiting for Malaysia's 1Q 2025 GDP growth data, with advance estimates of a 4.4 per cent expansion. He noted that the data will be a key factor in Bank Negara Malaysia's (BNM) decision on whether to ease monetary policy, as well as the forecast for GDP growth this year. 'As such, we expect ringgit to trade more cautiously today,' he told Bernama. Meanwhile, Mohd Afzanizam noted that the US Dollar Index (DXY) was down by 0.16 per cent to 100.87 points, while the United States (US) Producer Price Index (PPI) continued to moderate to 2.4 per cent year-on-year in April after sustaining at 3.4 per cent in February and March. This suggests that inflation in the US will continue to ease and create more room for the US Federal Reserve (Fed) to cut rates this year, he added. 'However, Fed chair Jerome Powell's speech at the Thomas Laubach Research Conference in Washington hinted that the inflation trend is likely to be more erratic due to the supply shocks, which have become more frequent and potentially more persistent. 'This could mean the Fed is not keen to ease its monetary policy stance in the near term, which would affect the ringgit,' he said. At the opening, the ringgit traded mostly higher against a basket of major currencies. It was up against the British pound to 5.6819/7105 from 5.6862/6961 at Thursday's close, and rose vis-a-vis the euro to 4.7800/8040 from 4.7939/8023 yesterday, but edged down versus the Japanese yen to 2.9338/9490 from 2.9326/9379 previously. At the same time, the local note was traded mixed against its ASEAN peers. It climbed versus the Singapore dollar to 3.2931/3102 from 3.2950/3010 yesterday and gained against the Philippine peso to 7.66/7.70 from 7.67/7.69 previously. The ringgit had also strengthened against the Indonesian rupiah at 258.3/259.7 from 258.8/259.4 at the previous close, but fell against the Thai baht to 12.8630/9367 from 12.8198/8488 yesterday.
New Straits Times
16-05-2025
- Business
- New Straits Times
Ringgit continues to improve ahead of Malaysia's 1Q GDP announcement
KUALA LUMPUR: The ringgit has continued its positive momentum, opening stronger against the US dollar this morning, ahead of Malaysia's first quarter (1Q) 2025 gross domestic product (GDP) announcement today, an analyst said. At 8am, the local note appreciated to 4.2705/2920 versus the greenback from Thursday's close of 4.2795/2870. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said markets are waiting for Malaysia's 1Q 2025 GDP growth data, with advance estimates of a 4.4 per cent expansion. He noted that the data will be a key factor in Bank Negara Malaysia's (BNM) decision on whether to ease monetary policy, as well as the forecast for GDP growth this year. "As such, we expect ringgit to trade more cautiously today," he told Bernama. Meanwhile, Mohd Afzanizam noted that the US Dollar Index (DXY) was down by 0.16 per cent to 100.87 points, while the United States (US) Producer Price Index (PPI) continued to moderate to 2.4 per cent year-on-year in April after sustaining at 3.4 per cent in February and March. This suggests that inflation in the US will continue to ease and create more room for the US Federal Reserve (Fed) to cut rates this year, he added. "However, Fed chair Jerome Powell's speech at the Thomas Laubach Research Conference in Washington hinted that the inflation trend is likely to be more erratic due to the supply shocks, which have become more frequent and potentially more persistent. "This could mean the Fed is not keen to ease its monetary policy stance in the near term, which would affect the ringgit," he said. At the opening, the ringgit traded mostly higher against a basket of major currencies. It was up against the British pound to 5.6819/7105 from 5.6862/6961 at Thursday's close, and rose vis-a-vis the euro to 4.7800/8040 from 4.7939/8023 yesterday, but edged down versus the Japanese yen to 2.9338/9490 from 2.9326/9379 previously. At the same time, the local note was traded mixed against its Asean peers. It climbed versus the Singapore dollar to 3.2931/3102 from 3.2950/3010 yesterday and gained against the Philippine peso to 7.66/7.70 from 7.67/7.69 previously. The ringgit had also strengthened against the Indonesian rupiah at 258.3/259.7 from 258.8/259.4 at the previous close, but fell against the Thai baht to 12.8630/9367 from 12.8198/8488 yesterday. -- BERNAMA
Epoch Times
15-05-2025
- Business
- Epoch Times
New Era of ‘Supply Shocks' Could Force Higher Long-Term Interest Rates, Says Powell
A period of supply disruptions may reshape the U.S. economy, leading to unstable inflation and sustained higher interest rates, says Federal Reserve Chair Jerome Powell. Powell appeared before the Thomas Laubach Research Conference in Washington on May 15 to discuss the U.S. central bank's monetary policy framework review. In prepared remarks, Powell said that the economic environment has drastically changed since the review was conducted in 2020. At the onset of the coronavirus pandemic, the U.S. and global economy witnessed near-zero interest rates to cushion the pandemic era's economic blows, leading to a prolonged period of above-trend inflation. Five years later, long-term inflation expectations are well anchored and align with the central bank's 2 percent objective. However, according to the Fed chief, it is unlikely that interest rates will flirt with near-zero rates again. Reiterating comments about fundamental policy changes and the possibility of supply chain snafus, Powell remarked on the new challenges monetary policymakers face. Related Stories 5/14/2025 5/9/2025 'Higher real rates may also reflect the possibility that inflation could be more volatile going forward than in the inter-crisis period of the 2010s,' Powell said. 'We may be entering a period of more frequent, and potentially more persistent, supply shocks—a difficult challenge for the economy and for central banks.' Powell said that the Fed needs to maintain inflation expectations at 2 percent, a global standard for advanced economies' central banks. With the Federal Reserve System entrenched in a policy examination—an assessment completed every five years of the institution's communication strategies, tools, and overall policy framework—central bank officials are pursuing different ways to communicate with the public. 'In periods with larger, more frequent, or more disparate shocks, effective communication requires that we convey the uncertainty that surrounds our understanding of the economy and the outlook,' Powell said. 'We will examine ways to improve along that dimension as we move forward.' The Fed plans to complete its monetary policy review in September. State of Trade Despite supply chain concerns, shipping statistics have indicated a rebound this month, weeks following President Donald Trump's April 2 sweeping tariff announcement. According to global tracker Vizion, global ocean bookings U.S. import bookings also soared about 40 percent last week after tanking close to 26 percent in the previous week. Chinese shipments to the United States have rebounded by more than 70 percent. In addition, the New York Fed's Last week, the Trump administration secured a trade deal with the United Kingdom and agreed to a 90-day tariff pause with the Chinese regime. During an event with executives in Qatar, the president announced on May 15 that India's government offered to eliminate tariffs on U.S. goods. 'It is very hard to sell in India, and they are offering us a deal where basically they are willing to literally charge us no tariffs,' Trump said in a meeting in the Qatari capital of Doha. President Donald Trump (L) and Qatar's Emir Sheikh Tamim bin Hamad Al Thani meet at the Amiri Diwan in Doha, Qatar, on May 14, 2025. Alex Brandon/AP Still, U.S. consumers are enduring an overall average effective tariff rate of nearly 18 percent, the highest since 1934, according to Yale's Budget Lab. Watching Interest Rates At last week's Following robust economic data, investors have pushed back their interest rate cut forecasts. A month ago, the consensus in the futures market was a June rate cut. As of May 15, according to the Officials have stated they can afford to be patient since the economy remains strong and policy is well-positioned to respond to changing conditions. So far, both sides of the twin mandate—maximum employment and price stability—are intact. On the inflation front, the April consumer price index (CPI) and producer price index (PPI) reports indicate that the disinflation trend continues. In the labor market, the U.S. economy created a better-than-expected 177,0000 new jobs last month. According to Charlie Ripley, a senior investment strategist at Allianz Investment Management, there is little urgency at the central bank to restart its easing cycle based on the flurry of data. 'The mantra for Chairman Powell's Fed has always been to make sound policy decisions established from the certainty of economic statistics, or in other words, remaining heavily data dependent,' Ripley said in a note emailed to The Epoch Times. Until signs of sizable weakness exist, Powell and his colleagues will stay in a wait-and-see policy position, Ripley said. The Fed will hold its next two-day policy meeting on June 17 and June 18. Investors will pay close attention as officials release the updated Summary of Economic Projections, a quarterly survey of policymakers' expectations for the economy and policy.
Yahoo
15-05-2025
- Business
- Yahoo
Powell warns economy could face more frequent 'supply shocks'
Federal Reserve Chairman Jerome Powell on Thursday said that the central bank's framework for setting monetary policy may need to be adjusted to account for the possibility that supply shocks will become more common given the difficulties they pose for policymakers. Powell delivered remarks at the Federal Reserve's Thomas Laubach Research Conference and said that the central bank's policy rate – the target range for the benchmark federal funds rate – could be higher in the future because of the potential for volatility with inflation and supply shocks occurring more often. "Many estimates of the longer-run level of the policy rate have risen, including those in the summary of economic projections," Powell said. "Higher real rates may also reflect the possibility that inflation could be more volatile going forward than during the inter-crisis period of the 2010s." "We may be entering a period of more frequent and potentially more persistent supply shocks – a difficult challenge for the economy and for central banks," the chairman added. Trump Lobbies 'Too Late Powell' To Cut Interest Rates Powell noted that the Fed's policy rate is currently well above the "lower bound" of cutting the policy rate to zero – it currently sits at a range of 4.25% to 4.5% – and that the central bank has historically made significant cuts during times of recession. Read On The Fox Business App "While our policy rate is currently well above the lower bound, in recent decades we have cut the rate by about 500 basis points when the economy is in recession. Although getting stuck at the lower bound is no longer the base case, it is only prudent that the framework continue to address that risk," Powell said. Goldman Sachs Says Undermining Central Bank Independence Has Economic Repercussions The Federal Reserve and other central banks face policymaking constraints when the policy rate is near zero, as it negates their ability to cut interest rates to stimulate the economy amid a downturn. Powell also discussed how keeping longer-run inflation expectations anchored at the Fed's 2% target will remain a key part of the Fed's policymaking framework, saying that while some aspects of it "must evolve, some elements of it are timeless." Federal Reserve Holds Key Interest Rate Steady Amid Economic Uncertainty He noted that its importance became clear during the Great Inflation, from the 1960s to 1982, and that it helped foster the Great Moderation of the mid-1980s to mid-2000s when there was relatively low economic volatility. "Policymakers emerged from the Great Inflation with a clear understanding that it was essential to anchor inflation expectations at an appropriately low level," Powell explained. "During the Great Moderation, well-anchored inflation expectations allowed us to provide policy support to employment without risking destabilizing inflation." "Since the Great Inflation, the U.S. economy has had three of its four longest expansions on record. Anchored expectations played a key role in facilitating these expansions. More recently, without that anchor, it would not have been possible to achieve a roughly 5 percentage point disinflation without a spike in unemployment," Powell article source: Powell warns economy could face more frequent 'supply shocks'
