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Hang Seng: Less-Hawkish-Than-Feared Fed Tone Supports Econ & Mkt Sentiment in Short Term
Recommend 6 Positive 9 Negative 4 |
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The Federal Reserve decided to lower the target interest rate by 0.25%, which Kelvin Lau, Chief Economist at Hang Seng Bank, believes aligns with market expectations. The rate cut decision was passed with a vote of 9 to 3, reflecting ongoing differences among Fed committee members about future interest rate trends. The wording of the post-meeting statement was tweaked, signaling a leaning towards unchanged rates in the next step. The interest rate dot plot, however, has not changed materially compared to three months ago. The median forecast still indicates one rate cut for each 2026 and 2027 and no changes for 2028. Lau also mentioned Fed Chair Jerome Powell's remarks during the press conference. According to Powell, this rate cut was mainly driven by the cooling labor market, and the current interest rate is roughly at a neutral level, allowing room for observation. As the Fed didn't give out more hawkish signals as the market initially feared, Lau believes this will support short-term economic and market sentiment. AAStocks Financial News |
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