The adjustment keeps Macau’s base rate aligned with Hong Kong’s under the linked exchange rate system. The Hong Kong Monetary Authority also reduced its base rate to 4.25 percent shortly after the Fed’s move.
The Federal Reserve concluded its two-day policy meeting by cutting the federal funds rate target range to between 3.75 percent and 4 percent — its second rate cut this year, in a move widely expected by markets. The decision passed with 10 votes in favor and two against. Fed Chair Jerome Powell described the reduction as a “risk management” step, emphasizing that another rate cut in December was “far from certain.”
The Fed also announced that it would stop shrinking its balance sheet starting December 1st. While overall asset holdings will remain unchanged, proceeds from maturing mortgage-backed securities will be reinvested into U.S. Treasury bills to adjust the composition of its portfolio.
Analysts say the synchronized rate cuts reflect the close monetary linkage between Hong Kong and Macau and the U.S. dollar system, which continues to influence liquidity conditions across the region.
