Caught in the Fed’s crossfire

The Fed’s move creates a difficult balancing act for Malaysia: preserve price and financial stability without choking domestic investment and consumption. — Bloomberg

THE US Federal Reserve’s (Fed) latest rate hike is a reminder that Malaysia’s economic fortunes remain closely tied to decisions made thousands of kilometres away.

The Fed raised its benchmark rate by 25 basis points to 3.75%-4%, its first increase since 2023, signalling that US interest rates could remain higher for longer.