HKMA: Interest rates will be relatively high for some time

The Hong Kong Monetary Authority said on Thursday there is a chance that interest rates in the city will remain at "relatively high levels" for a while, after the US central bank kept the target range for the federal funds rate unchanged.

The Federal Reserve had left key overnight interest rates steady in the 4.25 percent to 4.50 percent target range, with its chair Jerome Powell saying there would be no rush to cut them again.

Hong Kong's de-facto central bank said in response that the policy decision was "in line with market expectations".

"However, the pace of future rate cuts remains uncertain as it is dependent on US inflation and labour market data developments, the effect of previous rate cuts, as well as the impact of fiscal, economic and trade policies adopted by the new administration on economic activity," the authority said in a statement.

"Interest rates in Hong Kong might still remain at relatively high levels for some time, and the extent and pace of future US interest rate cuts are subject to considerable uncertainty."

The public should exercise caution when making property purchase, mortgage or other borrowing decisions, it said.

The Fed, as expected, left its key lending rate unchanged, resisting pressure from President Donald Trump to continue with cuts in the first rate decision since his return to office.

Stocks did not move significantly after the decision or during a news conference with Fed Chair Jerome Powell.

"We're looking at a major plethora of earnings data," Adam Sarhan of 50 Park Investments said of results later on Wednesday from Meta, Tesla, and others.

The Dow Jones Industrial Average finished down 0.3 percent at 44,713.

The broad-based S&P 500 declined 0.5 percent to 6,039, while the tech-rich Nasdaq Composite Index dropped 0.5 percent to 19,632.

Wednesday's session extended a choppy trend this week after revelations about Chinese artificial intelligence firm DeepSeek pummeled Nvidia and other US stocks on Monday before they rebounded on Tuesday. Nvidia fell four percent on Wednesday.

Markets also digested congressional testimony from Trump's commerce secretary nominee Howard Lutnick, who touted the virtues of tariffs, a lingering source of unease for investors.

"The market knows tariffs are coming," Sarhan said. "We don't know what the effect will be."

Among individual companies, Starbucks shot up 7.8 percent after reporting lower profits in results that still beat expectations. New CEO Brian Niccol expressed confidence about restoring growth at the coffee chain.

Trump Media & Technology Group gained 7.3 percent as it announced a venture with Charles Schwab, establishing a program to promote "American First investment vehicles." Schwab advanced 0.4 percent.