Hong Kong stocks finished flat in red territory on Friday amid concerns that local interest rates may not drop in the coming months, as the US Federal Reserve is not expected to lower rates in June.

The Hang Seng Index dipped 0.01%, or 1.18 points, to finish the day’s trade at 16,723.92. The Hang Seng China Enterprises Index (HSCEI) shed 0.19%, or 11.42 points, to 5,863.57.

The market’s cautious tone stemmed from uncertainties surrounding potential interest rate cuts. Hong Kong’s monetary policy is closely linked to the US Federal Reserve’s decisions. Recent higher-than-expected inflation data in the US has raised doubts about the timing of a potential rate cut by the Fed in June.

Earlier in the day, Mark Andersen, co-head of global asset allocation at UBS, told CNBC International TV that the “very recent inflation prints that were a little bit on the higher side has put some question to [the] markets [as to] when the Fed exactly will start cutting interest rates.”

Anderson believes a June rate cut is “at least very close to 50:50 at this point in time”.

His comment followed Minneapolis Fed President Neel Kashkari’s interview with Pensions and Investments on Thursday, where Kaskhari sounded skeptical about any rate cut if American inflation remained sticky.

In corporate news, China Oilfield Services 601808 lost over 16%, after having surged earlier this week.