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

The Federal Open Market Committee of the Federal Reserve (the Fed) announced earlier today (Hong Kong time) its decision to keep the target range for the federal funds rate unchanged at 3.5-3.75%. 

The policy decision is in line with market expectations.  The “dot plot” released following the meeting indicated that the Fed might cut rates by 25 basis points before year end.  However, the market generally considers that the path of US monetary policy remains quite uncertain, while recent tensions in the Middle East region introduce greater uncertainty to oil prices as well as the outlook for US inflation. 

Hong Kong’s monetary and financial markets have continued to operate in an orderly manner.  Under the Linked Exchange Rate System, Hong Kong dollar interbank rates generally track the US dollar counterparts, while shorter-tenor interbank rates tend to be also influenced by the supply and demand of Hong Kong dollar funding in the local market such as seasonal factors and capital market activities. 

The future trend of US interest rates is quite uncertain, which may influence the interest rate environment in Hong Kong.  The public should carefully manage interest rate risks when making decisions about property purchase, investment or borrowing.  The HKMA will continue to closely monitor market developments and maintain monetary and financial stability.

Hong Kong Monetary Authority
19 March 2026