The HKMA’s Response to the US Fed’s Interest Rate Decision

The Federal Open Market Committee (FOMC) of the Federal Reserve, also known as the Fed, announced today that it has decided to maintain the target range for the federal funds rate at 5.25-5.5%. The FOMC’s decision reflects its cautious approach to interest rate adjustments, which will depend on incoming data, the evolving economic outlook, and the balance of risks. The Fed has not yet gained enough confidence in the trajectory of US inflation to initiate interest rate cuts, suggesting that the current high interest rate environment may persist for a while. In Hong Kong, the financial and monetary markets continue to function smoothly and in an orderly manner. The exchange rate of the Hong Kong dollar remains stable. However, it is anticipated that the Hong Kong dollar interbank rates may remain elevated for an extended period. In light of this, the public is advised to carefully assess and manage the associated risks when making decisions related to property purchases, mortgages, or other borrowing activities. The Hong Kong Monetary Authority (HKMA) will maintain close monitoring of market developments and work towards ensuring monetary and financial stability in the region. Resources: https://www.hkma.gov.hk/eng/news-and-media/press-releases/2024/05/20240502-3/