Fed Rate Decision & Meeting Dates: How It Affects Hong Kong Rates

The US Federal Reserve held interest rates at 3.75–4.00% on 28 October 2026, after raising them in September for the first time in three years. Economists expect another hike at the next Fed meeting, with the decision due at 3am Hong Kong time on 10 December. The Hong Kong Monetary Authority (HKMA) responded the following morning, noting that the Fed's decision to hold rates steady was in line with market expectations.

However, a Fed decision does not necessarily lead to immediate changes in the interest rates Hong Kong borrowers pay or savers receive. This article explains where US rates are heading, when the Fed meets next, what drives interest rates, and why Hong Kong rates do not always move in line with the Fed under the Linked Exchange Rate System.

Most leading institutions expect the Fed’s next move to be a hike on 9 December, taking its rate to 4.00–4.25%¹. Some disagree: for example, New York Fed President John Williams sees no need for a hike in 2027², and Morningstar expects cuts in the second half of 2027³.

From December 2025 to October 2026, the Fed cut once (December 2025), held through five meetings, raised rates to 3.75–4.00% in September 2026⁴, then held on 28 October. Two of the 12 voters wanted another hike, and the Fed again said inflation “remains elevated”⁵. Fed officials’ latest projections, the “dot plot”, point to 4.1% by end-2026, a hold in 2027, then gradual cuts to 3.6% by 2029⁶.

What the Fed, major US banks and economists expect (as of 29 October 2026)

Legend: ↑ one 0.25-percentage-point hike; ↑↑ two hikes; → hold; ↓ one or more cuts.

Bank forecasts change often; each row shows the latest view we could verify on its date.

Investors widely expect a hike at the next meeting¹³. On the eve of the October meeting, futures priced roughly an 86% chance of a December hike⁹. The Fed decides on 9 December (10 December, 3am Hong Kong time).

The Fed announces its decision on the last day of each meeting, usually in the early hours of the morning Hong Kong time¹⁴. The HKMA usually announces its base rate later that morning, Hong Kong time. 2027 dates are provisional and may change.

Three forces have pushed the Fed toward hiking in 2026, and one is holding it back.

One more factor makes rates harder to predict: Fed Chair Kevin Warsh gives little forward guidance. Economists’ confidence in their own forecasts has dropped since he took over²³, so the market widely believes incoming inflation and jobs data are especially important to rate expectations.

Across the meetings shown below, the HKMA base rate followed the Fed, but HSBC’s prime rate did not change. From December 2025 to October 2026, the Fed changed rates twice, cutting in December 2025 and hiking in September 2026. The HKMA base rate matched both the next morning, but HSBC’s prime rate stayed at 5.00% throughout this period.

Under the linked exchange rate system, the HKMA base rate is tied to the Fed by formula. However, HIBOR and the prime rate respond to other forces too, so they do not necessarily move at the same time or by the same amount as Fed rates.

Why do Hong Kong rates lag the US?

The currency peg is a key channel through which US rates affect HIBOR:

1. When US rates are well above HIBOR, investors may borrow cheaper Hong Kong dollars to buy US dollars (the “carry trade”).
2. This can push the Hong Kong dollar to the weak end of its band, HK$7.85, where the HKMA must buy Hong Kong dollars. Between late June and mid-August 2025, the HKMA intervened 12 times, buying about HK$120 billion in total³⁵. Funding costs, competition for deposits, loan demand and the local economy. HSBC's prime rate has remained unchanged at 5.00% since October 2025³⁶, close to the weak end.
3. Those purchases drain cash from banks, tending to push HIBOR toward US rates.

Each step can take time. Capital flows and local funding demand, including IPO activity, can also affect HIBOR. On 29 October the HKMA said again that interbank rates depend on appetite for the carry trade and on demand for Hong Kong dollars from capital-market activity and seasonal factors³³. Banks set prime based on their funding costs and other commercial considerations.

Rates are hard to call right now. Within two weeks, Goldman Sachs moved its next-hike forecast from October³⁷ to December, and said there may be no further hike at all³⁸. Tariffs, the Iran war, oil prices and a Fed chair who gives little guidance all make the path harder to read.
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When is the next Fed rate decision?

The Fed announces its next decision on 9 December 2026, which is 3am on 10 December in Hong Kong. The full calendar is in section 2.

If the Fed raises rates, will Hong Kong rates rise?

The HKMA base rate follows the Fed under its formula, usually the next morning. But each bank sets its own prime rate: for example, after the Fed’s September 2026 hike, HSBC’s prime rate stayed at 5.00%.

What is the difference between HIBOR and the prime rate?

HIBOR is the rate at which banks lend to each other, set by the supply of and demand for Hong Kong dollars; H-plan mortgages are priced on it. Each bank sets its own prime rate; P-plan mortgages are priced on it.

How do Fed rate hikes affect Hong Kong time deposits?

After the Fed’s September hike, several Hong Kong banks raised their time deposit rates. For the latest rates, see our HKD time deposit rate comparison.
 

This article reflects third-party views and public data as of the dates shown. It is not financial advice. Bank forecasts and market rates change frequently; please speak to a licensed adviser before making financial decisions.
 

Sources

1. Reuters via KFGO, Factbox: major brokerages expect next Fed rate hike in December, 15 Oct 2026
2. CNBC, Williams says Fed may not have to hike rates in 2027, 13 Oct 2026
3. Morningstar, What to expect from the October 2026 Fed meeting, Oct 2026
4. US Federal Reserve, FOMC statement, 16 Sep 2026
5. US Federal Reserve, FOMC statement, 28 Oct 2026
6. US Federal Reserve, Summary of Economic Projections, 16 Sep 2026
7. Investing.com, Fed hold expected as markets watch for December hike signals, 26 Oct 2026
8. Reuters via Khaleej Times, Goldman Sachs, J.P. Morgan expect September Fed hike, 14 Sep 2026
9. IndexBox, Fed expected to hold in October as most brokerages see December hike, 28 Oct 2026
10. Reuters via IDN Financials, Morgan Stanley and Macquarie add March 2027 hike, ~17 Sep 2026
11. Reuters via Kitco, Morgan Stanley turns more hawkish, 15 Sep 2026
12. Morningstar, We see rate cuts in 2027, Sep 2026
13. NPR, Fed holds interest rates steady even as inflation remains stubborn, 28 Oct 2026
14. US Federal Reserve, Meeting calendars and information (checked 30 Oct 2026)
15. US Bureau of Labor Statistics, Consumer Price Index news release, September 2026 (published 14 Oct 2026)
16. AP via News4JAX, The war in Iran has shaken up financial markets, 31 Mar 2026
17. The Vibes, Brent breaks above US$100, 10 Sep 2026
18. Fox Business, Iran war could push inflation higher this year, Goldman Sachs says
19. US Tariff Rates, citing Reuters, Fed holds rates, Powell says tariffs keeping inflation elevated, Mar 2026
20. ING THINK, THINK Ahead: How our 2026 predictions have aged, 10 Jul 2026
21. US Bureau of Labor Statistics, Employment Situation, September 2026 (published 2 Oct 2026)
22. US Bureau of Labor Statistics, Employment Situation, September 2026 (states the next release date)
23. Reuters poll via Kitco, Fed to hold rates; rising number of analysts see at least one hike, 9 Sep 2026
24. China Daily HK, HKMA cuts base rate to 4% following Fed move, 11 Dec 2025
25. The Standard, Hong Kong lenders keep prime rate unchanged at 5 percent, Dec 2025
26. RTHK, HKMA keeps rates unchanged after Fed decision, 29 Jan 2026
27. SCMP, HKMA keeps base rate unchanged; HSBC, StanChart, BOCHK hold prime rates, Mar 2026
28. SCMP, HKMA holds base rate at 4%; HSBC, StanChart, BOCHK keep prime and savings rates unchanged, Apr 2026
29. RTHK, HKMA holds base rate; HSBC and BOCHK keep prime at 5%, 18 Jun 2026
30. SCMP, HKMA keeps base rate at 4%, 30 Jul 2026
31. HKMA, Adjustment of Base Rate, 17 Sep 2026
32. Longbridge, HKMA raises rate for first time in three years, 17 Sep 2026
33. Reuters via The Standard, HKMA leaves interest rates unchanged, 29 Oct 2026
34. FXStreet, Market note incl. HSBC prime rate, 29 Oct 2026
35. The Standard, HKMA steps in at weak-side convertibility trigger, 14 Aug 2025
36. CNA via UA.News, Hong Kong keeps base rate at 4.25%, 29 Oct 2026
37. Reuters via KFGO, Goldman Sachs sees October Fed hike, 17 Sep 2026
38. Reuters via Kitco, Goldman Sachs pushes Fed rate hike forecast to December, 1 Oct 2026