Hong Kong Banking Association: Expectations for US interest rate cuts cool, need to pay attention to changes in trade negotiations.

Chairperson of the Hong Kong Association of Banks, Alice Hu, stated after a meeting that the global market is closely watching the Federal Reserve's December interest rate meeting. After two rate cuts this year, the market originally expected a chance of another 25 basis points cut by the US, but the Federal Reserve did not clearly indicate whether there will be further rate cuts after last month's meeting. At the same time, futures data show that expectations of rate cuts are gradually diminishing, increasing uncertainty about the pace of rate cuts, leading to diverging views on the Federal Reserve's rate cut in the market. Looking ahead for the rest of the year, the global market environment is still full of uncertainties, and it is important to continue monitoring the fluctuating trade negotiations and geopolitical situations. She mentioned that the Hong Kong stock market has been active this year, continuously attracting strong inflows of funds. After a meeting between the leaders of China and the US last month, they reached multiple economic and trade agreements, opening up dialogues and achieving positive results, easing uncertainties related to tariffs and providing a boost to the global market. The Hong Kong government also raised its economic forecast for the year to 3.2% last week, reflecting continuous improvement in the economy. Furthermore, Alice Hu stated that the Association of Banks welcomes the Hong Kong Monetary Authority's publication of the new Fintech Development Strategy "Fintech 2030", focusing on four key areas known as "DART", including building data and payment infrastructure, applying artificial intelligence, enhancing business and technology resilience, and promoting financial tokenization. She believes that the vision of "Fintech 2030" is clear and comprehensive, building on the digital transformation achievements of the past 5 years under "Fintech 2025", proposing forward-looking and robust strategies to promote long-term development of Hong Kong's financial technology and accelerate the city's transformation into an international financial technology hub. The Association of Banks has been encouraging the banking industry to actively support regulatory-led fintech pilot projects, including the Hong Kong Monetary Authority's upcoming "Generative AI Sandbox++", to drive industry-government innovation collaboration.