Deputy Governor Park Jongwoo:
"Uncertainty over U.S. monetary policy remains high"
"Geopolitical risks are rising... We will closely monitor the markets"
"I believe that uncertainty regarding the future path of U.S. monetary policy remains high. Risks in the Middle East have also increased, so we will remain vigilant and closely monitor the potential for heightened volatility in the financial and foreign exchange markets."
Park Jongwoo, Deputy Governor of the Bank of Korea, held a market monitoring meeting at the Bank of Korea in Jung-gu, Seoul, on June 19, and made these remarks while assessing the impact of the U.S. Federal Open Market Committee (FOMC) results on domestic and international financial and foreign exchange markets.
At this FOMC meeting, the U.S. Federal Reserve kept its policy rate unchanged as expected by the market and maintained its projection for two policy rate cuts in 2025. However, the projection for 2026 was reduced to one cut. In the Summary of Economic Projections (SEP), the Fed lowered its growth outlook and raised its inflation forecast. Jerome Powell, Chair of the Fed, expressed concern about inflation risks stemming from tariff policy at a press conference and reaffirmed that the Fed would continue to base its monetary policy decisions on economic indicators for the time being.
Deputy Governor Park stated, "Chair Powell maintained a cautious stance, indicating that policy decisions would be made prudently in consideration of the impact of U.S. tariff policy. In addition, the outlooks of Fed officials differ significantly, so uncertainty regarding the future path of monetary policy remains high." He added, "Recently, geopolitical risks have risen sharply, including military clashes between Iran and Israel and concerns about escalation. We will remain especially vigilant and will monitor market conditions more closely to prepare for the possibility of increased volatility in the financial and foreign exchange markets."
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