Seoul: Uncertainty over the path of U.S. monetary policy has deepened amid heightened tensions in the Middle East, a senior official at South Korea's central bank said Thursday. On Wednesday (U.S. time), the Federal Reserve kept its benchmark interest rate unchanged at the 3.5-3.75 percent range for the second consecutive time, while maintaining its projection of one rate cut this year.
According to Yonhap News Agency, Fed Chair Jerome Powell indicated at a press conference following the decision that the surge in oil prices has increased inflationary pressures, signaling a cautious stance on the timing of further rate cuts. This has contributed to the uncertainty surrounding the Federal Reserve's future monetary policy direction.
"Following the outcome of the Federal Open Market Committee meeting, uncertainty over the Federal Reserve's monetary policy path has increased further, while external risk factors, including ongoing instability in the Middle East, continue to persist," Bank of Korea (BOK) Deputy Gov. Yoo Sang-dai said while presiding over a market assessment meeting.
Yoo emphasized the need for vigilance, stating, "We will remain on high alert and closely monitor the development of both internal and external risk factors and their impact on the markets and the economy," while also pledging to implement "timely market stabilization measures" if necessary.