International | Jun 15 2006
There appears to be a consensus of opinion building that there will be two more interest rate rises in the US this year, with first Morgan Stanley and now HSBC raising the possibility.
Both expect to see a 25 basis point rise at the FOMC meeting at the end of June and while Morgan Stanley flags a further rise in September as a possibility, HSBC is more positive that September will see a rate of 5.5%.
Hong Kong is unlikely to follow in the US’ footsteps, HSBC says.
Despite the correction, fund outflows from the Hong Kong market have been negligible, the economists say, and given the "buoyant liquidity conditions locally" Hong Kong is not expected to follow suit and HSBC predicts rates to peak in the middle of 2006.
By Terry Hughes
