HKMA’s Response to US Fed’s Interest Rate Decision
The Federal Open Market Committee of the Federal Reserve (the Fed)
announced early today (Hong Kong time) after its two-day meeting that
it had decided to keep the target range for the federal funds rate
unchanged at 5. 25-5. 5%.
The Fed’s future interest rate
decisions will be dependent on incoming data, the evolving outlook and
the balance of risks. Inflation pressure in the US has somewhat abated
lately, and the market expects that the easing cycle might begin soon.
Based on the Fed’s public communication, a rate cut might happen as
soon as the meeting in September. Yet, it remains uncertain whether
the pace of easing will follow market expectation.
Hong
Kong’s financial and monetary markets continue to operate in a smooth
and orderly manner. The Hong Kong dollar exchange rate remains stable.
The Hong Kong dollar interbank rates will stay relatively high for the
time being, while the future rate path remains uncertain. The public
should carefully assess and manage the relevant risks when making
property purchase, mortgage or other borrowing decisions. The HKMA
will continue to closely monitor market developments and maintain
monetary and financial stability. Hong Kong Monetary Authority 1
August 2024