KUALA LUMPUR: The US Federal Reserve may lower interest rates three times this year, however, officials have clarified that they require further evidence of a weakening economy before they can proceed with reducing the benchmark rate.
Three rate cuts were indicated by officials as a feasible baseline for 2024 in the Fedspeak statement for the day, according to a report from CIMB Research.
"Cleveland Fed President Loretta Mester (voter), however, said it remains a 'close call' whether fewer are needed and that more evidence of cooling inflation is needed before cutting rates.
"San Francisco Fed President Mary Daly (voter) also said there's no urgency to adjust rates due to current strong growth," the firm said in a note.
On the regional front, CIMB Research said currencies faltered amid earlier dollar strength, with the Ringgit and Thai baht seeing sharp weaknesses and underperforming peers.
The Ringgit fell 0.5 per cent while the Thai baht dropped 0.6 per cent. The rupiah saw a more muted performance amid Bank Indonesia's (BI) intervention on spot and domestic non-deliverable forward foreign exchange markets.
"BI says it sees current pressure as temporary with market conditions manageable, while explaining that the Indonesian rupiah has been impacted by yuan depreciation, domestic higher dollar demand for dividend repatriation and foreign outflows from bond markets, and the above-expectation March inflation," it added.