F oreign investors recorded a net inflow of RM6.1 billion into Malaysian bonds in March, reversing a RM2.5 billion net outflow in February. This was the strongest monthly inflow in 10 months.
Related Brief 1d ago
monetary policy Kevin Warsh's Fed Nomination Threatens to Raise Borrowing Costs for a Pricey Stock Market
Borrowing costs will likely increase for a stock market currently powered by the artificial intelligence revolution and priced at historically expensive levels. This shift is driven by the Federal Reserve's nomination of Kevin Warsh to succeed Jerome Powell as Fed chair on May 15. Warsh's voting record during the financial crisis indicates a preference for price stability over unemployment, suggesting he is unlikely to advocate for aggressive interest rate cuts. Warsh has also advocated for a radical reduction of the Federal Reserve's balance sheet, which currently holds approximately $6.66 trillion in total assets as of April 8, 2026. To achieve this reduction, the the Fed would sell off long-term Treasury bonds and mortgage-backed securities. This action reduces Treasury bond prices, which boosts bond yields and increases borrowing costs. Higher borrowing costs lower the value of an expensive stock market.
Demand was driven by RM5.1 billion in inflows to Malaysian Government Securities (MGS) and RM2.8 billion into conventional corporate bonds.
Related Brief 3d ago
global finance War in Middle East triggers capital reversal in emerging markets
Emerging markets are experiencing a reversal of capital flows from nonresident nonbank investors. This shift follows the intensification of the US war against Iran and the naval blockade of the Strait of Hormuz. The IMF notes that since 2008, portfolio inflows to emerging markets have increased eightfold to $4 trillion, with 80 percent of that capital supplied by investment funds, hedge funds, pension funds, and insurance firms. This nonbank finance is increasingly sensitive to global risk conditions. The conflict has caused infrastructure damage, supply disruptions, and losses of confidence, which have shifted those conditions. These risks have now come to the fore as emerging markets face increased financial instability.
This recovery in sentiment occurred despite a volatile global bond market. In late March, volatility in US Treasuries, as measured by the MOVE Index, reached an 11-month high. The 10-year US Treasury yield climbed from 3.97% at end-February to 4.44% on March 27.
Related Brief Just now
federal reserve The Senate Blockade and the Legal Shield Protecting Jerome Powell
Jerome Powell will remain as acting chair of the Federal Reserve if Kevin Warsh is not confirmed by the Senate by May 15. Powell's term as chair expires that day, but he intends to stay until a successor is confirmed. President Donald Trump has pledged to fire Powell if he does not resign. The transition is stalled by Senator Thom Tillis, a Republican, who has vowed to block Warsh's advancement until a Justice Department probe into Powell concludes. U.S. Attorney Jeanine Pirro is leading the investigation into whether Powell misled Congress about a $2.5 billion renovation of the Fed's headquarters. Because of Tillis's opposition, Warsh needs at least one Democratic vote to move forward. Powell has dismissed the probe as a pretext for political pressure to cut interest rates, which currently remain above 4%. He is a confirmed governor through 2027. The Supreme Court is currently weighing the scope of presidential power over the Fed in a case involving Governor Lisa Cook, whom Trump attempted to remove in August over allegations of mortgage fraud. If the Court limits the president's ability to remove Fed governors without cause, Trump cannot legally fire Powell from his governorship.
Market sentiment shifted toward a higher-for-longer interest rate environment. CME FedWatch data showed the probability of the Fed keeping policy rates unchanged at the April and June Federal Open Market Committee meetings rose to 99.5% and 98.0% respectively, up from 75.4% and 42.7% at end-February.
Related Brief 2h ago
inflation Higher Oil Prices Will Keep Inflation Near 3% Through Year-End, Fed Official Says
Core inflation is expected to end the year near 3%, according to St. Louis Federal Reserve President Alberto Musalem. This projection, he said, reflects the ongoing inflationary pressure from higher oil prices, which have climbed from $70 to $95 a barrel since the Middle East conflict escalated. The rise in energy costs has already increased fuel, transport, and shipping expenses, with ripple effects across supply chains. Musalem said these pressures are likely to keep U.S. inflation above the Fed’s 2% target through the end of the year. As a result, investors are increasingly betting the Federal Reserve will maintain its current pause on interest rate cuts as it continues to monitor inflation developments.
This shift was driven by concerns over a potential oil-induced inflation shock following supply disruptions linked to an escalation of conflict in the Middle East.
Related Brief 3h ago
central bank independence Criminal probe into Federal Reserve renovation blocks Senate confirmation of Kevin Warsh
Kevin Warsh cannot be confirmed as Federal Reserve Chair as long as Senator Thom Tillis blocks the nomination. Tillis has threatened to block Warsh unless the Trump administration drops a criminal investigation into Jerome Powell regarding cost overruns on the Federal Reserve building renovation. Donald Trump has refused to drop the probe, stating, “Don’t you think we have to find out what happened there?” Jerome Powell plans to remain in office until Warsh is confirmed, but his term expires on May 15. Trump has threatened to fire Powell if he does not leave by that date.
Rising US yields exerted upward pressure on regional markets, lifting the 10-year MGS yield 14.4 basis points to 3.66% at end-March.
Related Brief 4h ago
federal reserve Trump’s Threat to Fire Powell Hinges on a Renovation Probe, Not Rates
Federal Reserve Chair Jerome Powell could be fired if he stays in office past May 15, not because of interest rate policy, but over a criminal investigation into the central bank’s building renovation. Powell’s term expires on that date, but he intends to remain in the role until Kevin Warsh, Trump’s nominee to succeed him, is confirmed by the Senate. That confirmation is now in jeopardy. Thom Tillis, a Republican senator on the committee overseeing Fed nominations, has refused to advance Warsh’s appointment unless the probe into Powell is dropped. The investigation centers on renovation costs at the Federal Reserve building, which Trump claims ran into billions of dollars—far exceeding an estimated tens of millions it should have cost. Trump has refused to terminate the probe, telling Fox Business, “Don’t you think we have to find out what happened there? I have to find out.” He has threatened to fire Powell if he remains in office after his term ends, saying, “Then I’ll have to fire him.” The law allows Powell to stay on temporarily, as has been done before, but Trump insists he will not hold back on removal. The conflict is not about interest rates, as publicly framed, but about accountability for spending and the political conditions attached to a key central bank appointment.
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