U.S. Fed hold rates at zero, but projects two hikes by end of 2023
Updated: 2021-06-17 17:25:18 KST
The Federal Reserve concluded a two-day meeting on Wednesday by keeping its benchmark interest rate unchanged at a range of zero to a quarter percent… the same rate that it has been at since March last year.
However, the Federal Open Market Committee said eleven of its 18 members forecast at least two rate hikes before the end of 2023, with seven seeing a move as early as next year.
Thirteen favored at least one rate hike by the end of 2023.
When it comes to tapering, or slowing the purchases of 120 billion U.S. dollars of assets a month, Chairman Jerome Powell said the U.S. economy was not yet at point where tapering purchases is appropriate.
Powell said the Fed will give advance notice before announcing a decision regarding tapering and that any decision will depend on the progress of the economic recovery.
Responding to the Fed's meeting, South Korea's financial authorities said on Thursday they will closely watch any potential volatility in the financial market, and act accordingly.
"As there are risk factors to the real economy and financial markets, such as a rise in international commodity prices, while caution over inflation and premature tapering remains, we will closely monitor related economic data and look to countermeasures."
He added that the Korean economy has recovered enough to handle such risks, citing strong exports and Korea's default risk being at its lowest since 2008.
And… the Bank of Korea said that it found the FOMC meeting to be somewhat hawkish, hinting at monetary tightening.
Vice president of the Bank of Korea, Lee Seung-heon stated that volatility in the domestic and international financial markets is likely to increase, following economic policy changes from major economies including the U.S.
He added that Korea's central bank is planning to strengthen the monitoring of any factors which could lead to market instability, and implement measures to stabilize the market if necessary.
Seo Eunkyung, Arirang News.