On the early morning of September 19th, Beijing time, the Federal Reserve announced a 0.5% interest rate cut. Hang Seng Bank believes that the expectation of an economic soft landing is favorable for traditional US economy stocks and high-yield stocks that have been relatively underperforming in the past two years. At the same time, Asian risk assets are expected to benefit significantly from the Federal Reserve's substantial rate cut, especially in markets like Hong Kong, mainland China, and ASEAN regions that are highly related to global interest rates, global economic cycles, and global trade. The valuation of these markets is expected to be adjusted upwards. Liang Jun Fan, Chief Investment Officer of Wealth Management at Hang Seng Bank, stated that the Federal Reserve announced a 50 basis point interest rate cut, officially starting an interest rate cut cycle. The committee's latest forecast indicates that there may be another 50 basis point cut before the end of the year. Chairman Powell stated that the market should not interpret this 50 basis point cut as a new trend, suggesting that future rate cuts will still be gradual. The meeting statement shows that the Federal Reserve is quite confident in the future economic performance of the United States and will continue to support employment through its monetary policy, enhancing market predictions of a soft landing for the US and global economies. Xue Junsheng, Head of Economic Research Department and Chief Economist at Hang Seng Bank, mentioned that after the Federal Reserve's interest rate meeting, Powell's comments at the press conference reflect that the Fed has changed its policy stance, believing that inflation risks have decreased and that labor market, not inflation pressures, are on the rise. However, from the forecasts of the committee members, it is evident that the Fed still has confidence in the US economy. Despite initiating rate cuts, the pace of rate cuts in the next two years is not expected to accelerate. The rate cut next year is forecasted to be 1%, the same as previous estimates, and 50 basis points for 2026, less than the previously predicted 1%. Hang Seng Bank believes that uncertainty over US interest rates still exists in the future, but the direction is becoming clearer. Hong Kong interest rates are expected to follow the downward trend, which will help support economic growth in Hong Kong. In the bond market, as concerns over an economic recession temporarily eased, long-term US bond yields did not fall further from their recent low levels on the night of the interest rate decision. However, as short-term rates are expected to gradually decline in line with the Fed's rate cuts, Hang Seng Bank believes that long-term bond yields will remain stable. Investors should take advantage of the current high interest rates to deploy medium to long-term investment-grade bonds in US dollars to lock in future returns.