Bank of Korea Vice Governor Kwon Min-soo stated on September 17 that the U.S. Federal Reserve's monetary policy is expected to remain tight in the future.
Kwon made the remarks during a market situation review meeting related to the Federal Open Market Committee (FOMC) regular meeting held earlier that day, noting that the FOMC raised the policy interest rate as the market anticipated.
During the FOMC meeting on September 15-16 (local time), the Federal Reserve raised the policy interest rate by 25 basis points (1 basis point = 0.01 percentage points), as expected by the market. The Summary of Economic Projections (SEP) indicated an upward revision in growth and inflation forecasts, along with an increase in the projected policy interest rate (dot plot). Of the 18 committee members who submitted the dot plot, 16 predicted a 25 basis point rate hike by the end of this year.
Kwon noted, "With the Fed raising rates for the first time in over three years since July 2023, and considering Chair Powell's emphasis on price stability and hints at further rate increases, we expect the Fed's monetary policy to remain tight going forward."
He added, "External risk factors persist, including the situation of the Middle East conflict affecting international oil prices, concerns over fiscal soundness in major countries, and uncertainties related to the artificial intelligence (AI) industry. With monetary policy decisions from major countries like Japan and the UK scheduled for this week, we will closely monitor the domestic financial and foreign exchange market conditions with heightened vigilance."
* This article has been translated by AI.
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