HKMA holds base interest rate at 4%, following Fed as war inflation worries persist

The Hong Kong Monetary Authority (HKMA) has maintained its base interest rate at 4%, mirroring the US Federal Reserve's decision. This move comes as concerns about inflation, exacerbated by the US-Israel war with Iran, are expected to diminish the likelihood of a rate cut in Hong Kong this year. The HKMA's announcement followed the Federal Reserve's decision to keep its target rate between 3.5% and 3.75%. Fed Chairman Jerome Powell indicated a wait-and-see approach regarding future monetary policy adjustments. The HKMA's decision was made on Thursday, aligning with the Fed's FOMC meeting.

The US Federal Reserve has decided to maintain its interest rates at 3.5-3.75 percent. This decision, announced on Wednesday following a two-day policy meeting, comes amid concerns about persistent inflation and global economic strain. The Fed cited rising global energy prices, partly influenced by developments in the Middle East, as a significant factor contributing to elevated inflation. While the majority of officials voted to hold rates steady, there were notable dissents, indicating potential divisions within the central bank regarding future monetary policy adjustments. The Fed's statement highlighted the uncertainty surrounding the economic outlook due to these geopolitical events.