BOK: "Uncertainty Over U.S. Monetary Policy Path Increases... Timely Response If Needed"

Bank of Korea Holds Market Monitoring Meeting

"Concerns Over Prolonged Middle East Conflict, Close Monitoring of Financial and Economic Impact"

Yoo Sangdae, Deputy Governor of the Bank of Korea, stated on April 30 that, in relation to the results of the U.S. Federal Open Market Committee (FOMC) meeting, "There is significant division among opinions within the Federal Reserve (Fed), and with the emphasis on inflation stemming from rising oil prices, the uncertainty surrounding the path of U.S. monetary policy after the inauguration of the next Fed Chair has increased even further."

According to the Bank of Korea, Deputy Governor Yoo presided over a market monitoring meeting at the Bank of Korea on the same day, during which he reviewed the outcomes of the U.S. FOMC meeting, the evolving situation in the Middle East conflict, and the potential impact on international financial markets as well as domestic financial and foreign exchange markets.

He also stated, "As concerns are mounting over the prolonged nature of the Middle East conflict, particularly due to difficulties in U.S.-Iran negotiations, we will remain vigilant, closely monitor the development of both domestic and external risk factors and their financial and economic impacts, and respond in a timely manner if necessary."

The Fed, during the regular FOMC meeting held on April 28-29 (local time), kept the policy rate unchanged at 3.50-3.75%, as widely expected by the market. However, four members expressed dissenting opinions and opposed the rate freeze in this decision. This marks the first time in approximately 34 years, since October 1992, that four members have officially voiced opposition during an FOMC meeting.

Fed Governor Stephen Miran proposed a 0.25 percentage point cut, while three regional Fed presidents—from Cleveland, Minneapolis, and Dallas—opposed the inclusion of language indicating an easing bias.

At a press conference, Fed Chair Jerome Powell noted that while there are increasing signs of stabilization in the labor market, energy price hikes have heightened inflationary pressures in the short term, expressing a cautious outlook.

In international financial markets, international oil prices surged on the possibility of a prolonged U.S. maritime blockade of Iran. The FOMC results were interpreted as hawkish, leading to a substantial increase in U.S. Treasury yields, a stronger dollar, and stock prices remaining flat.

This FOMC meeting was the last to be chaired by Powell. From the next meeting onward, Kevin Warsh, whose nomination was recently approved by the U.S. Senate Banking Committee, will preside as the new Fed Chair.

This content was produced with the assistance of AI translation services.