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HSBC Forecasts Another Rise of US Interest Rates
The United States Federal Reserve is expected to raise short-term interest rates by 50 basis points by March with a "hard landing" for the economy at the end of next year, according to HSBC Securities.
Any further rises in US interest rates could force Hong Kong banks to increase prime lending rates, reports Hong Kong's English newspaper "South China Morning Post" Thursday.
The slowdown in the US economy could cut economic growth in Asia by a "couple of percentage points," the paper quoted HSBC Securities Chief Ian Morris as saying.
HSBC's interest-rate forecast goes against widespread expectations that the US Federal Reserve may have finished its series of increase.
Although there are signs the US economy is slowing, many indicators, such as rising bank loans and house prices, suggest the economy is growing too fast.
"The risks to growth are still on the upside," Morris said.
The economy will be boosted after November's presidential election as both leading candidates plan to loosen fiscal policy.
HSBC forecasts real GDP in the United States to rise 5.2 percent this year followed by 2.3 percent next year and 0.6 percent in the following year.
A sharp slowdown will cut imports to the United States and reduce the current account deficit, which was 4.3 percent of GDP in the second quarter.
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