Bank of Korea Holds FOMC Review Meeting: "U.S. Monetary Policy Uncertainty to Persist"

Yoo Sangdae: "Uncertainties Remain Over U.S. Tariff Policy and Other Risk Factors"

Yoo Sangdae, Deputy Governor of the Bank of Korea, held a market situation review meeting on January 29 regarding the regular meeting of the U.S. Federal Open Market Committee (FOMC). He assessed, "Although the market remained generally stable following the overnight announcement of the FOMC results, uncertainty surrounding the future path of U.S. monetary policy is expected to persist, given the content of Chair Powell's press conference and the timeline for nominating his successor as Federal Reserve Chair."

Deputy Governor Yoo further emphasized, "In this environment, we will continue to closely monitor market conditions with a sense of caution, as domestic and external risk factors such as ongoing uncertainty over future U.S. tariff policy, concerns about fiscal soundness in major economies, and geopolitical risks remain present."

At its first meeting of the year, the Federal Reserve kept its policy rate (the target range for the federal funds rate) unchanged at 3.50-3.75% per annum, in line with market expectations. The Fed explained that while inflation risks persist, growth and employment have improved, which was the reason for holding rates steady.

In a press conference, Federal Reserve Chair Jerome Powell did not rule out the possibility of a rate cut within the year, but maintained a cautious stance, stating that future policy decisions would be based on data received at each meeting.

In the international financial markets, the impact of the FOMC results was limited, with U.S. Treasury yields, stock prices, and the dollar remaining flat or posting slight gains.