US Fed may cut interest rate three times this year as economy slows: Shanghai Commercial Bank

The US Federal Reserve may cut the interest rate three times this year to support its economy, according to the Shanghai Commercial Bank.

The cut may start from June under the new chair, bringing the rate to a sub-3 percent terminal in 2026, said Ryan Lam Chun-wang, head of research at the lender. 

Rate cuts would have a limited impact on inflation, and Fed officials may not be as hawkish as expected because the country’s economy is not so strong, he said. He sees a growth rate of around 2 percent for the world’s largest economy in 2026.

Lam expects the US consumption growth to slow to 2 percent this year as the personal saving rate dropped further to just 4 percent last year. He said the US dollar index may fall to around 95 before rebounding as the rate-cut cycle comes to an end. 

He expects Hong Kong’s property prices to grow by 3.5 to 4 percent in 2026, despite estimating little change in the mortgage rate. Homebuyers’ purchasing power remains strong, and end-users' confidence in the market also rises, he said.