Lee: Bank Negara is expected to watch growth data closely to see whether an expected pick-up in GDP growth materialises in H2. Despite weaker-than-expected second quarter GDP growth, the central bank is convinced the factors dragging down growth will dissipate in H2..
LOW US inflation that is considered transitory, may provide some relief to Asian markets already alert for any change in the US interest rate stance.
In deciding to stay put and not give in to intense pressure to lower rates, the Federal Reserve may be concerned, among other things, about further fuelling asset bubbles.The Fed funds rate may remain the same in 2019-2020; there is no threat for the Fed’s outlook on inflation at around 2%, to overshoot that level.
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