Pressure is building to normalise rates, and each delay will lead to more volatility in the capital markets
The US Federal Reserve’s decision to keep interest rates on hold was not a surprise. But what did raise eyebrows was the dissent of three “hawkish” voting members who wanted a rate hike now, a rare split that marked only the fourth time since 1992 that three voters had broken ranks with a majority decision.
The rate hold spurred a rally across bonds, equities, industrial commodities and emerging market assets. Hong Kong’s property market, lacklustre for most of last and this year, has seen some signs of a revival in recent weeks. The glacial pace of the Fed’s tightening – whose effects in Hong Kong are transmitted through the Hong Kong-US dollar peg – may well spark another round of property speculation.
