HKMA warns high interest rates ‘may last for some time’ as it delays cutting the cost of funds in lockstep with US Fed

“It is likely that gaining greater confidence will take longer than previously expected,” Powell said.

Powell sought to assure the market, saying that it would be “unlikely” for the Fed’s next move to raise rates, adding that officials would need to see “persuasive evidence that policy is not tight enough” before taking action.

Hong Kong keeps rate at 5.75% as Fed watches over US inflation

Hong Kong’s stock market advanced after the latest move, following the overnight rally in the US bond market that was unleashed by Powell’s assurance. The city’s benchmark Hang Seng Index rose for the eighth day, gaining by as much as 1.5 per cent in recent trading.

Hong Kong’s declining home prices dragged more mortgage borrowers into negative equity, putting them under greater financial strain as property prices show little prospect of rising amid a lethargic housing market and high interest rates.

The aggregate value of negative-equity loans rose to HK$165.3 billion (US$21.1 billion), compared with HK$131.3 billion at the end of December.

“The public should carefully assess and manage the relevant risks when making property purchase, mortgage or other borrowing decisions,” the HKMA reiterated. “The HKMA will continue to closely monitor market developments and maintain monetary and financial stability.”