Last week, the Federal Reserve's interest rate cut exceeded market expectations. HSBC stated that the magnitude of the Fed's rate cut did not trigger an excessive reaction from investors, but it anticipates six more rate cuts in the future and maintains a cautiously optimistic outlook on the global economic prospects.
Ray Li Fan, Head of Investment and Wealth Management for Wealth Management and Personal Banking in Asia-Pacific at HSBC, said that investors did not overreact to the Fed's rate cut this time. Investor sentiment did not change significantly based on whether the Fed's rate cut was by 25 basis points or 50 basis points. The current investment concept of "putting money in and getting returns from cash" will continue for some time. However, since investors had already established a certain psychological expectation before the rate cut, the Fed's rate cut this time is conducive to investors further adjusting their deployment plans for cash assets, but it cannot be said to have caused panic or excessive joy in market sentiment. This rate cut indicates a turning point in the interest rate cycle, and the Fed has finally taken action.
Liu Yu Chi, Head of Capital Markets Investment Business for Global Private Banking and Wealth Management in Asia-Pacific at HSBC, said that there will be more rate cuts in the future. HSBC expects six more rate cuts, each reducing by 25 basis points, lowering the target range of the federal funds rate from the current 4.75% to 5% to 3.25% to 3.5%. Liu Yu Chi said that for the stock market, more consideration will be given to economic expectations rather than just the rate cut process, and HSBC still maintains a cautiously optimistic attitude towards the global economic outlook.
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Ray Li Fan said that HSBC manages $607 billion in Asian investment assets, achieving a year-on-year increase of 21% in asset scale in the second quarter of 2024, and achieving strong double-digit growth in capital market returns in the first half of 2024. Wealth investment management is also deployed in various aspects such as financial security, personal planning (such as retirement), and core asset solutions.
Chen Hui Mei, Global and Asia Consulting Head for Global Private Banking and Wealth Management at HSBC, said that with the popularization of financial technology, banking institutions also pay attention to the application of technology. HSBC will launch the innovative SmartMatch feature to help customers optimize asset allocation more accurately through technology.
In terms of wealth growth in various regions, Ray Li Fan noticed significant growth in Singapore, with a wide range of asset sources. HSBC observed that assets from some countries in the Asia-Pacific region continue to flow into Singapore, and Singapore has also attracted wealth from Australia and China. It can be affirmed that Singapore is a growing center, but Ray Li Fan said that Hong Kong's growth is also considerable.
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