On Thursday, the HKMA maintained its rate at 4.75 per cent, hours after the Fed left its target range between 4.25 per cent and 4.5 per cent during the fifth Federal Open Market Committee (FOMC) meeting of the year. The Fed has stood pat on rates for five meetings in a row, despite pressure from Trump to cut the cost of funds.
“There are many, many uncertainties left to resolve,” Fed chairman Jerome Powell said after the FOMC voted 9-2 in favour of keeping its target rate unchanged. “It doesn’t feel like we are very close to the end of that process.”
The FOMC’s decision was expected and almost fully priced by rates traders, according to data compiled by the CME Group, based on Fed fund futures contracts on Wednesday.
US stock indexes plunged and Treasury yields rose in the worst FOMC-day sell-off since December after Powell downplayed the prospects of cutting interest rates in mid-September when the FOMC is scheduled to meet next.
