JPMorgan: It is expected that HIBOR will need to drop below 2.2% to affect interest rates, with SWIREPROPERTIES as the primary choice.
JPMorgan released a research report stating that recently, the Hong Kong Interbank Offered Rate (HIBOR) has significantly decreased from approximately 4% to around 3.1%. From a fundamental perspective, it is expected to have a positive impact on real estate stocks as borrowing costs decrease. It is predicted that for every 1 percentage point decrease in floating interest rate debt financing costs, real estate developers' profits could increase by an average of 5%. However, JPMorgan pointed out that unless HIBOR falls below 2.2%, it is not expected to affect mortgage rates, and the fluctuations of HIBOR are not considered the main factor influencing the performance of real estate stock prices. Currently, there is a more bullish outlook on stocks with stable dividends, good capital recovery, and involvement in essential consumer goods retail.
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The Federal Reserve has maintained interest rates for the third consecutive time, and Powell admits that the impact of tariffs is much greater than expected.
At 2 PM Eastern Time on Wednesday, the Federal Reserve announced that it would keep the benchmark interest rate unchanged at 4.25%-4.50%, meeting market expectations, and marking the third consecutive meeting of inaction. The Federal Reserve emphasized in its rate statement that both inflation and unemployment risks are rising. "The uncertainty surrounding the economic outlook has increased further," the statement released after the two-day meeting by the Federal Open Market Committee (FOMC) stated. "The committee is concerned about the risks facing its dual mandate and determines that the risks of rising inflation and unemployment are both increasing." Federal Reserve officials unanimously voted to maintain the federal funds rate.
Deutsche Bank's chief economist for the USA: The Fed's first interest rate cut this year is expected in December.
Bob Michele, the Global Fixed Income head at JPMorgan, stated after the Federal Reserve announced its rate decision that the Fed "avoided" the need to weigh the priority of its two missions. Michele pointed out that the Fed emphasized the rising risks of both inflation and unemployment. Matthew Luzzetti, Chief US Economist at Deutsche Bank, indicated that he significantly lowered the likelihood of a rate cut in June and expects the Fed's first rate cut this year to be in December. Former Federal Reserve Vice Chairman Rich Clarida noted that the market has priced in a probability of 40%-50% for an economic recession.
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