Hong Kong, May 5 (ZXS) -- The US Federal Reserve (Federal Reserve) announced a 4.5% interest rate hike on May 3, US time, and hinted or did not raise interest rates further. The analysis believes that the US interest rate hike cycle may be nearing the end, but the global economy has not yet picked up, market risk factors still exist, and investors should be stable.
This is the tenth time the Fed has raised interest rates in more than a year, with a cumulative increase of 500 basis points. The Fed deleted the words "expected some additional policy tightening or appropriate" from its rate hike statement, noting that "the magnitude of policy tightening will depend on economic data," suggesting or pausing further rate hikes.
On the 4th, the Hong Kong Monetary Authority followed the Fed's interest rate hike and raised the basic interest rate to 5.5%. Yue Wai-man, chief executive of the Hong Kong Monetary Authority, said the rate hike was in line with market expectations and would not affect Hong Kong's monetary and financial stability. However, the future trend of interest rates will depend on economic data, and there is uncertainty; It remains to be seen how the recent credit tightening caused by the financial difficulties of individual US banks will affect economic activity and monetary policy.
Federal Reserve Chairman Powell said that the US banking system is sound, but the supervision of the same type of banks will be strengthened in the future. Wang Zhaozong, general manager of investment management of BOCHK, believes that relevant institutions responded quickly to the incident to prevent the spread of negative sentiment, but market confidence is still weak, and investors still need to pay attention to the tightening of bank credit and its impact on inflation.
Wen Fan, a veteran bond market practitioner in Hong Kong, told China News Agency that the possibility of the Fed's subsequent interest rate hike is not high. Bank events in individual regions of the United States show that at the end of the interest rate hike cycle, market risk factors still exist, and follow-up investment should be mainly prudent and conservative.
Huang Junnong, international global market and foreign exchange strategist at Everbright Securities, told reporters that although the Fed hinted or suspended interest rate hikes, investors are concerned about when they will cut interest rates and "release water" to support the economy. However, Powell said that interest rates may not be cut in the second half of this year. Therefore, in the absence of monetary policy support, the economy has failed to recover, and market sentiment is expected to become cautious, for example, the stock market will see a "small rise and a big recovery", and the investment direction should be mainly safe-haven instruments, such as high-rated bonds or gold.
Wang Zhaozong believes that at the end of the interest rate hike cycle, the Fed needs more time to observe the impact of the current interest rate level on the economy and prices, so as to adjust the pace of monetary policy, so it is too early to talk about interest rate cuts. (End)