U.S. interest rate hike | The Fed raises interest rates by 0.5% in line with market expectations that the balance sheet will shrink by $47.5 billion in June

The U.S. Federal Reserve announced the results of its May interest rate meeting in the early hours of today (5th) Hong Kong time. As expected by the market, it will raise interest rates by 0.5% to between 0.75% and 1%. This is the second interest rate hike since December 2018. The rate hike was two yards for the first time since May.

The bureau also announced that it will begin shrinking its balance sheet in June, with the scale remaining at a maximum of US$47.5 billion per month in August and expanding to US$95 billion in September.

The Federal Reserve said in a statement that in order to reduce inflation to about 2% and maintain a strong labor market, the Fed decided to raise interest rates to a range of 0.75 to 1%, and it is expected that continued interest rate hikes are appropriate.

In addition, the bureau will begin shrinking its balance sheet from June 1 to a maximum of $30 billion in treasuries and $17.5 billion in mortgage-backed securities in August, and will increase to a maximum of $60 billion in treasuries and $35 billion in mortgages in September. Mortgage securities, the strength is within the market expectations.

DBS expects Hong Kong to start raising interest rates at the end of the year, the prime interest rate will rise by 0.125%, and the property price will increase by zero. US interest rates will increase. The interest rate hike was 0.25% higher than expected, and the Australian dollar rose. DBS earned 10% less in the first quarter, but still better than expected.

CICC to raise interest rates as usual