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HKMA holds Hong Kong base rate at 4% after Fed keeps rates

The Fed kept its target rate in the 3.5% to 3.75% range, while Hong Kong’s base rate decision came as US stocks slid sharply after bond signals raised inflation-fight concerns.

Reported · Written up by our desk · Central Banks

Hong Kong’s monetary authority kept the city’s base rate unchanged at 4% after the US Federal Reserve held its own policy rate steady, according to SCMP Economy. The HKMA decision followed the Fed’s conclusion of its fifth FOMC meeting this year, with the US target rate maintained in the 3.5% to 3.75% range.

SCMP Economy reported that US markets weakened after signals from the bond market suggested the Fed could be behind in its inflation fight. On Wednesday, the Dow Jones fell 2.2%, the S&P 500 dropped 1.5%, and the Nasdaq declined 1.7%.

The outlet also cited Fed chairman Kevin Warsh, who said there is no soft inflation target and reiterated that the committee’s target remains 2%. Ahead of the Fed decision, SCMP Economy noted that 67.9% of traders expected no change, based on CME FedWatch data using Fed funds futures contracts.

In Hong Kong, T.O. & Associates Consultancy’s Tommy Ong said the Fed’s decision could be slightly positive for the city’s real estate and stock market. He added that any upside may be limited because the next US inflation readings are uncertain, SCMP Economy reported.

Latest closeS&P 500 7,316.15 ▼1.5%|Nasdaq Comp. 24,442.94 ▼1.7%|Dow Jones 51,594.14 ▼2.2%

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