Hong Kong matches US Fed's first rate cut of 2025, in boon for mortgage borrowers, economy

Group 1 - The Hong Kong Monetary Authority (HKMA) cut the city's base rate by 25 basis points to 4.5%, the first reduction this year, aligning with the US Federal Reserve's recent cut [2][3] - This new base rate is the lowest since December 2022, aimed at reducing funding costs for businesses and alleviating the burden on mortgage borrowers [2] - HKMA's chief executive stated that the lower interest rate is expected to positively impact Hong Kong's economy and property market [3] Group 2 - The US Federal Reserve cut its target rate to a range of 4% to 4.25%, citing signs of weakness in the US labor market as a key reason for the decision [2][4] - The Fed's rate cut was anticipated, with 94% of traders expecting a 25-basis-point reduction, indicating a potential rate-cut cycle extending into the next year [5] - Analysts suggest that the downturn in the US labor market supports the shift in rate-cut expectations, with inflation being a critical factor to monitor moving forward [6]