HKMA keeps base rate steady in lockstep with Fed’s defiance of Trump’s push amid trade war

The Hong Kong Monetary Authority (HKMA) kept its base rate unchanged in lockstep with the US Federal Reserve, as policymakers await clarity on the potential inflationary impact of President Donald Trump’s tariffs.

The HKMA maintained the base rate at 4.75 per cent on Thursday after the Fed left its target in a range of 4.25 to 4.5 per cent, following the third Federal Open Market Committee (FOMC) meeting of the year.

At a press conference after the announcement, Fed chairman Jerome Powell said there was no need to be in a hurry to change US monetary policy and “the decision was clear” to wait and watch data for any inflationary impact from tariffs.

The Fed, which runs its monetary policy independently, has held its interest rate in place for three straight meetings despite pressure from Trump to make cuts. Last month, the president said on social media that the central bank has been “too late and wrong” in delaying reductions, a necessary move to ease the cost of funding in the economy.

The Fed’s decision was in line with market expectations, with 96.9 per cent of traders expecting no change, according to CME Group data, which was based on Fed fund futures contracts on Wednesday.