BOK: "US FOMC Decision Somewhat Hawkish... Timely Implementation of Market Stabilization Measures"

Park Jong-seok, Deputy Governor of the Bank of Korea, said on the 27th regarding the results of the regular meeting of the U.S. Federal Open Market Committee (FOMC) that "it is evaluated as somewhat hawkish" and added, "We will strengthen monitoring of the developments of domestic and international risk factors."

The Bank of Korea held a 'situation check meeting' at 8 a.m. that day, chaired by Deputy Governor Park Jong-seok, to review the international financial market situation following the FOMC results and the potential impact on the domestic financial and foreign exchange markets.

The U.S. Federal Reserve (Fed) decided at this meeting to keep the policy interest rate at the current level (0.00?0.25%) and to end asset purchases in early March. At the same time, it indicated the possibility of future policy rate hikes.

In the policy statement, the Fed explained that due to inflation significantly exceeding 2%, it seems appropriate to raise the policy rate soon and that there is room to increase rates without damaging the labor market.

Regarding this, Deputy Governor Park said, "Although the FOMC policy decision largely met market expectations, the press conference by Chairman Jerome Powell was evaluated as somewhat hawkish, leading to a significant rise in interest rates in the international financial markets and a strengthening of the U.S. dollar."

The 2-year U.S. Treasury yield rose by about 0.13 percentage points compared to the previous session, and the 10-year yield increased by about 0.10 percentage points. The U.S. Dollar Index rose about 0.6%, hovering in the mid-95 range.

Deputy Governor Park emphasized, "As the spread of the Omicron variant continues and geopolitical tensions between Russia and Ukraine escalate, with the Fed's monetary policy normalization accelerating, we will further strengthen monitoring of the developments of domestic and international risk factors," adding, "If necessary, market stabilization measures should be implemented promptly."