Anne Krueger, Former IMF Deputy Managing Director, "Not Surprising Even If No Rate Cut Within the Year"

Anne Krueger, the Stanford University Endowed Professor, said at a special press briefing hosted by the World Economy Research Institute held at Lotte Hotel in Jung-gu, Seoul on the 27th, "It would not be surprising even if there is no interest rate cut in the U.S. this year."

[Image source=Yonhap News]

Professor Krueger, who served as Vice President of the World Bank (WB) and the International Monetary Fund (IMF), said that while the U.S. Federal Reserve (Fed) is unlikely to raise interest rates for the time being, it also seems undecided about whether to cut rates.

She explained that since inflationary pressures have not yet been resolved and the U.S. labor market remains strong, the Fed is cautious about lowering interest rates.

She predicted that there might be no rate cuts within the year, noting that excess demand still exists in the U.S. and fiscal spending is unlikely to decrease ahead of the presidential election.

Regarding the outlook for South Korea's base interest rate, Professor Krueger only mentioned, "Although the indicators that the U.S. and South Korea consider when making interest rate decisions differ, such as trade balance and energy prices, the global economic situation must be taken into account."

Meanwhile, she cited trade uncertainties with China as a cause of the won's depreciation.

Professor Krueger evaluated the U.S. protectionism as a "policy error" and said, "I have doubts about whether the results of protectionism can be positive."