Hong Kong’s de facto central bank cut the city’s base rate for the first time this year, bringing down the cost of funding to help reboot businesses and reduce the burden on mortgage borrowers.
The Fed’s chairman Jerome Powell, pointed to growing signs of weakness in the US labour market to explain why officials decided it was time to cut rates after holding them steady since December, amid concerns over tariff-driven inflation.
“Labour demand has softened, and the recent pace of job creation appears to be running below the break-even rate needed to hold the unemployment rate constant,” Powell said in his post-meeting press conference. He added, “I can no longer say the labour market is ‘very solid’.”
The Fed’s 25-basis-point cut was widely expected. It is seen as the start of a rate-cut cycle that is likely to extend into next year. Some 94 per cent of traders expected a 25-basis-point cut, and the rest predicted a 50-basis-point cut, according to data from CME FedWatch, which was based on Fed fund futures contracts on Tuesday.
