HKMA warns of interest-rate risk as traders bet on September rate rise
HSBC, Standard Chartered, Bank of China (Hong Kong) keep their prime and savings rates unchanged, mirroring HKMA’s decision to hold steady
“US interest-rate adjustments will depend on developments in inflation, [the] labour market and other economic data, and may influence the interest-rate environment in Hong Kong,” the HKMA said in a statement on Thursday morning. “The public should carefully manage interest-rate risks when making decisions about property purchase, investment or borrowing.”
Hong Kong’s three note-issuing banks – HSBC, Standard Chartered and Bank of China (Hong Kong) – announced that they would keep their prime and savings rates unchanged, according to separate statements on Thursday.
The Hong Kong benchmark Hang Seng Index edged up 0.2 per cent to close at 25,858.88 on Thursday, while the US stock market slumped on Wednesday, with the Dow Jones down 1,152 points or 2.2 per cent, while the S&P 500 fell 1.5 per cent and the Nasdaq dropped 1.7 per cent. The decline came after the bond market signalled the Federal Reserve could be falling behind its inflation fight.
“For some households, businesses and market professionals, five years of high inflation have left a mistaken impression that is hard to shake – that the Fed’s implicit inflation target was somehow above 2 per cent,” Fed chairman Kevin Warsh said in a media briefing after hosting his second FOMC meeting.
“Let me reiterate: there is no soft inflation target. There is no soft implicit target, not on this committee’s watch. There’s only a target, and it’s 2 per cent.”