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U.S. interest rate hike | Experts predict that Hong Kong bank balances will break through 2% before the end of the year.

2022-06-17T07:15:42.896Z


The US Federal Reserve raised interest rates by 0.75%, and the one-month Hong Kong Interbank Offered Rate (HIBOR) related to housing mortgages rose to 0.58% for the 8th consecutive day. The interest rate difference between Hong Kong and the United States has triggered market carry trades. The HKMA expects banks to


The US Federal Reserve raised interest rates by 0.75%, and the one-month Hong Kong Interbank Offered Rate (HIBOR) related to housing mortgages rose to 0.58% for the 8th consecutive day.

The Hong Kong-US interest rate differential has triggered market carry trades, and the HKMA expects the balance of the banking system to fall below 300 billion yuan this Friday.


Some analysts predict that the US will still raise interest rates 4 times in the second half of the year, and the fastest rate will be increased by half a percentage point next month, which will speed up the "capitalization" of the Hong Kong dollar. It may fall by at least 100 billion yuan, which means that in the second half of the year, "investment" is 200 billion yuan, and the 1-month interest rate is expected to exceed 2%.


Recently, some analysts estimate that the Federal Reserve may have the opportunity to directly raise interest rates by 1% in the next meeting to deal with the current inflation level (file picture)

The market had expected that the U.S. inflation rate may soften, but the latest increase was 8.6%, the highest in 40 years .

In the face of high inflation, the US Federal Reserve accelerated its tightening measures and announced a 0.75% interest rate hike, the largest increase in 28 years. The target range for the federal funds rate rose to 1.5% to 1.75%.

Xue Junsheng: The Fed is in a dilemma and is expected to raise interest rates by half a percentage in July

Xue Junsheng, Head of Economic Research Department and Chief Economist of Hang Seng Bank (00011), said that from the interest rate statement and the press conference, it can be seen that the US Federal Reserve is in a dilemma.

He explained that the supply chain problems caused by the Russian-Ukrainian war and the new crown epidemic are one of the main culprits in pushing up prices. It is beyond the control of the Fed, so the Fed can only start from the demand side, by slowing down the growth rate of the economy, so as to cool down inflation.

According to the economic forecast of the Federal Open Market Committee (FOMC), the US GDP will grow by 1.7% this year, which is lower than the 2.8% expected in March; It seems to confirm this.

As for recent analysis and estimates, the Federal Reserve may have the opportunity to directly raise interest rates by 1% in the next meeting to deal with the current inflation level.

Xue Junsheng estimates that such extremes may not be necessary. At present, the US property market is showing signs of slowing down, and the stock market is also showing signs of softening, which has an impact on consumer confidence. He temporarily expects to raise interest rates by half a percentage point in July, but it still depends on economic data.

Xue Junsheng pointed out that from the interest rate statement and the press conference, it can be seen that the Fed is in a dilemma.

(file picture)

P may be increased by the year

Wang Liangxiang, managing director of Zhenxiang Consulting, predicts that the United States will raise interest rates by 0.5% in July and September, and 0.25% in November and December, that is, a total of 1.5% will be raised this year.

In other words, US interest rates will rise to 3.4% by the end of the year.

The rate of increase in US interest rates is faster than expected, and the first impact on Hong Kong is to accelerate the flow of Hong Kong dollar funds.

Since May, the HKMA has undertaken many Hong Kong dollar selling orders from the market, and it is expected that the balance of the banking system will shrink to 280.739 billion yuan by tomorrow (17th).

Wang Liangxiang said that the interest rate gap between Hong Kong and the United States is about 1%, and the interest rate hike in the United States will further widen the gap, leading to more cash transactions in the market, and the HKMA may need to enter the market more frequently. Since May, interest rate hikes have reduced Hong Kong bank balances by about 500 It is expected that the next interest rate hike will reduce the balance by more than 50 billion yuan, and it may fall below the 100 billion yuan level by the end of the year.

He also reminded that after the US raises interest rates again in July, the one-month interest rate in Hong Kong will have a chance to rise to 1.2%, and the HIBOR mortgage plan (H mortgage) will reach the cap of 2.5%; by the end of the year, the one-month interest rate will rise to 2.2 %, the bank's prime rate (P) has the opportunity to increase from July to September.

Wang Liangxiang predicts that the Fed will raise interest rates by half a percentage point in July and September respectively.

(file picture)

Xue Junsheng also predicted that the Hong Kong dollar interbank interest rate may rise to 1.75% by the end of the year, or even above the level of 2%, but the interest rate will still be closed quarterly, IPO listing and other factors, coupled with the uncertain economic outlook of the United States, stressed that there is no indicator that can be predicted The pace of interest rate hikes by the Bank of Hong Kong.

Property prices may fall 5% this year

As for whether the interest rate hike will affect the property market in Hong Kong, Wang Liangxiang believes or reduces his investment intention. The current return on buying and renting properties is about 2%, and after this rate hike, the H share is about 1.9%, which is close to the rental return rate. Further interest rate hikes in the United States have the opportunity to make Mortgage rates above 2% are higher than returns.

He expects that the property prices in Hong Kong will not change much from the second half of the year to the end of the year, but considering the decline in the first quarter, it is expected to drop by about 5% for the whole year, and the Hong Kong government will continue to increase the supply of land. The increase won't be much.

U.S. interest rate hike|Henderson Lin Damin: Expect Hong Kong to raise interest rates by up to 1%, the market can withstand U.S. interest rate hikes|China Merchants Wing Lung 12-month Hong Kong dollar fixed interest rate increased to 2.5%, returns and green bonds are on par with US interest rate hikes|Chen Maobo: Hong Kong’s property market is still Relatively stable, no need to worry too much about US interest rate hikes|Chen Maobo expects US interest rate hikes to increase stock market volatility and calls on citizens to manage risks carefully US interest rate hikes|HSBC, Hang Seng, Bank of China, Standard Chartered maintain prime rate unchanged

Source: hk1

All news articles on 2022-06-17

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