US Fed Raises Rates Amid Inflation Concerns, HK Base Rate Follows Suit

The US Federal Reserve raised its benchmark interest rate by a quarter of a percentage point to a target range of 3.75 to 4.00 per cent, marking its first increase since 2023.

According to Federal Reserve chief Kevin Warsh, the decision was made to tackle inflation that had been 'too high' for 'too long', with the Fed aiming to control price growth.

In response to the move, the Hong Kong Monetary Authority raised the city's base rate to 4.25 per cent, while the three note-issuing banks in Hong Kong - HSBC, Bank of China (Hong Kong), and Standard Chartered - kept their prime lending rates unchanged.

The US 10-year Treasury yield also fell back below 5 per cent, retreating to around 4.94 per cent after the Fed's announcement.