Hang Seng Bank senior advisor George Leung on Saturday said he hopes to see an upturn in the here economy now that the US central bank, the Federal Reserve, looks set to begin a cycle of interest rate cuts. "The forecasted rate cuts, I believe, will help alleviate pressure on SME [small and medium enterprise] interest payments and this will have a relatively large impact when it comes to boosting the economy," he said on a radio programme. In a speech on Friday at the Jackson Hole Economic Symposium in Wyoming, Federal Reserve chair Jerome Powell said the time had come for the United States to start cutting interest rates, adding that his confidence had grown that the battle against inflation is on track. Leung said he expects the Fed to announce a rate cut of a quarter of a percentage point at its next meeting, and that its benchmark interest rate may be half a percentage point lower by the end of the year. The Fed held the rate at 5.25 percent to 5.5 percent, at its last meeting, for the eighth time in a row. Leung said most bank loans here have interest rates priced off the interbank offered rate instead of the best lending rate. He said he expected this rate to come down once the Fed had cut its benchmark interest rate.
