In the latest turn of events, after Donald Trump’s victory in the US presidential election, the global financial market set its eyes on the Federal Reserve’s monetary policy, which was to be announced on 7th November, 2024. According to Reuters, the Fed cut interest by a quarter of a percentage. Moreover, Jerome Powell, chair of the Fed, mentioned that the presidential election results will not have any “near-term” impact on its monetary policy.
In Asia, the Hong Kong Monetary Authority (HKMA) reduced its interest rate by 25 basis points from 5.25% to 5.0% following the Fed move. The monetary policy of the Asian financial hub closely follows that of the United States, as its currency is tightly pegged to the US dollar within a range of 7.75 to 7.85 per dollar. This was the second rate cut by HKMA after it reduced its interest rate by 50 basis points in September this year.
HKMA stated that ” the pace of future rate cuts remains uncertain as it is subject to U.S. economic data, which will be influenced by fiscal, economic, and trade policies.” The authority further affirmed that the US rate cut cycle, which, in its initial stage, will not impact the country’s monetary and financial stability. “The financial and monetary markets had continued to operate in a smooth and orderly manner — HKMA added.”
