Fed's hawkish hold strengthens case for BOK's hike in November
The U.S. Federal Reserve's hawkish decision to hold interest rates steady has strengthened the case for the Bank of Korea (BOK) to raise its benchmark rate as early as next month, as stronger-than-expected growth and persistent inflation reinforce the need for further monetary tightening, analysts said Thursday. The Fed kept its benchmark interest rate unchanged at 3.75 to 4 percent on Wednesday…
The Federal Reserve's decision to keep interest rates steady has bolstered the argument for South Korea's central bank, the Bank of Korea (BOK), to raise its benchmark rate as soon as November, according to analysts. The U.S. central bank maintained its benchmark rate at 3.75 to 4 percent on Wednesday, but indicated that inflation remains high and reiterated its commitment to reducing it to its 2 percent target.
This stance has kept market attention on the possibility of another Fed rate hike in December, which could prompt the BOK to continue tightening monetary policy before the U.S. central bank acts again.
Although the BOK maintained its benchmark rate at 3 percent during its recent meeting, analysts believe the strong economic indicators present a compelling case for further tightening. Korea's real gross domestic product (GDP) grew by 1 percent in the third quarter, surpassing expectations. This robust growth, coupled with persistent inflation, underscores the necessity for the BOK to act sooner rather than later to bring inflation under control and maintain price stability.
Written by urgent.news from The Korea Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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- Fed's hawkish hold strengthens case for BOK's hike in November koreatimes.co.kr
