HKMA warns of uncertain US rate path

The Hong Kong Monetary Authority (HKMA) on Thursday said the Fed's decision to keep interest rates steady was in line with market expectations. In a statement, the HKMA said a Fed release following the Federal Open Market Committee meeting indicated the US central bank might cut rates by a quarter of a percentage point before the end of the year. It said the future trend of US interest rates was quite uncertain, and — with the Hong Kong dollar linked to the US dollar — that may influence the interest rate environment here. Therefore, it said, the public should carefully manage interest rate risks when making decisions about property purchases, investments, or borrowing. The Federal Open Market Committee of the Federal Reserve (the Fed) earlier announced its decision to keep the target range for the federal funds rate unchanged at 3.5 to 3.75 percent. "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," the HKMA said. "The HKMA will continue to closely monitor market developments and maintain monetary and financial stability." Edited by Tony Sabine