The current base rate in Hong Kong is the lowest since October 2022. Together with a total of 50 basis points in cuts over the past two months, both Hong Kong and US central banks have lowered their key interest rates by 75 basis points, or three-quarters of a point.
The Fed’s decision was widely expected, with 87.6 per cent of traders forecasting a 25-basis-point cut, while 12.4 per cent predicted no change, according to data from CME FedWatch, which was based on Fed fund futures contracts on Wednesday. The move, in a rarely seen split decision, fell short of the demands for bigger cuts by US President Donald Trump, as three of the FOMC’s 12 members dissented with the rate cut decision.
“Inflation has moved up since earlier in the year and remains somewhat elevated,” according to a release by the FOMC. “Uncertainty about the economic outlook remains elevated. The committee is attentive to the risks to both sides of its dual mandate and judges that downside risks to employment rose in recent months.”
