Remarks after FOMC Meeting

Speeches

19 Sep 2019

Remarks after FOMC Meeting

Norman T.L. Chan, Chief Executive, Hong Kong Monetary Authority

  1. The US Fed decided to cut its policy rate by 25 basis points last night. This morning the HKMA also adjusted the Base Rate for the Discount Window downward by 25 basis points to 2.25%
  2. It is worth noting that FOMC Members’ forecasts on interest rate outlook by the end of this year are clearly divided. Seven Members predicted one further rate cut, and five predicted no change, with another five predicting a rate hike. Considering the US economy is still growing reasonably well, FOMC’s divided views on short-term interest rate outlook is rather unusual.
  3. In the longer run, HKD interest rates should track USD interest rates, but short-term interest rate movements are affected by changes in supply and demand of HKD funding. Given the uncertainties about interest rates outlook in the US, the public should continue to manage risks prudently.
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Last revision date : 19 September 2019