Group 1: Federal Reserve Policy - The pause in interest rate cuts aligns with market expectations, with no signals on the timing of the next cut, emphasizing data and economic outlook assessments[2] - The Fed upgraded its assessment of economic activity, stating it is expanding at a "robust" pace, while uncertainties remain high[2] - The employment market shows signs of stabilization, with the Fed removing previous language about rising downside risks in employment[2] Group 2: Future Leadership and Implications - Market predictions suggest Rieder has nearly a 50% chance of being nominated as the next Fed Chair, while Warsh's probability has dropped below 20%[2] - Trump's ideal candidate would be a loyal and credible dovish figure, but loyalty may take precedence over credibility[2] - If Rieder is nominated, the dollar index is expected to decline further, despite support for dollar assets[2] Group 3: Economic Risks and Projections - Risks include the potential for U.S. labor market and economic data to exceed expectations[6] - There is a risk of unexpected liquidity issues in the U.S. Treasury market[6] - Trump's policies may stimulate inflation beyond expectations[6] - The dollar index is projected to decline further in 2026, benefiting multinational corporate profits[2]

Core Viewpoint - The Mortgage Market Index (MMI) for December 2025 has dropped to 3.25%, marking a monthly decline of 6 basis points and a three-month consecutive decrease, reaching a five-month low [1] Group 1: Mortgage Rates - The majority of new mortgage owners are opting for H mortgage plans, with Hong Kong banks having lowered the best lending rate by a total of 0.25% in September and October last year [1] - The capped interest rate for new H mortgages has now fallen to 3.25%, leading to a corresponding decline in the MMI [1] Group 2: Economic Outlook - The U.S. labor market has not shown signs of accelerated deterioration, and it is expected that the Federal Reserve will maintain its current stance in the upcoming meeting [1] - The one-month HIBOR is currently at 2.79%, and its movement will depend on U.S. interest rates and capital flows [1] Group 3: Future Projections - It is anticipated that HIBOR will fluctuate between 2% and 3% in the first half of the year, with the actual interest rate for new H mortgages expected to remain at 3.25% [1] - Should there be an influx of capital into Hong Kong, HIBOR may challenge levels below 2%, potentially allowing H mortgage owners to secure loans at rates lower than the capped interest rate, which could lead to further adjustments in the MMI [1]

Core Viewpoint - Han Ya Investment predicts that the Federal Reserve will lower the federal funds rate by 25 basis points to a range of 4.0% to 4.25% in September, influenced by concerns over a weakening labor market [1] Group 1: Federal Reserve Rate Expectations - Han Ya Investment's chief investment officer and chief economist express a dovish outlook based on Jerome Powell's recent speech, indicating potential rate cuts if the unemployment rate rises to 4.3% or higher in August [1] - The firm suggests that if the unemployment rate remains stable or decreases from July's 4.2%, along with job additions close to 50,000, the FOMC may maintain current policy [1] Group 2: Market Reactions and Economic Indicators - Asset prices are expected to be highly dependent on the pace of deterioration in the U.S. labor market, with a gradual rise in unemployment potentially leading to a perception of rate cuts as a preventive measure against recession, which could benefit the stock market [1] - However, rising inflation may limit the upward potential of long-term yields, indicating a complex relationship between interest rates and market performance [1] Group 3: Currency and Global Policy Implications - A weaker dollar is anticipated to drive further rate cuts in Asia, as strong currencies combined with slowing export growth could keep inflation low and real policy rates excessively high [1] - The firm forecasts that most Asian economies will lower interest rates in the next two quarters [1]