UBS Wealth Management released a report on Friday expecting a further period of tightening in the United States. The Federal Reserve is expected to raise interest rates twice in 2019, but the partial inversion of the yield curve of U.S. Treasury bonds and Fed Chairman Powell's "slightly below" neutral comments on interest rates have significantly lowered expectations of a rise in interest rates in U.S. policy, which will be a factor in easing interest rate pressures in Asia.
Philip Wyatt, Asia-Pacific economist at UBS Wealth Management Investment Director's Office, said the prospect of slowing economic growth in Asia in 2019 led to market expectations of slowing or even stabilizing policy interest rates.
The report says long-term bond yields have responded to recent oil price adjustments, especially in economies with current account deficits. Policy interest rates in Indonesia, the Philippines and India have been suspended, while South Korea and Taiwan are expected to raise interest rates by another 25 basis points. As for China, the report anticipates that the government's policy will be significantly relaxed from the first quarter of next year, and that it is expected to reduce the deposit reserve ratio by 100-200 basis points.
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