Base Rate Raised by 0.25 percentage points Amid Inflation Pressures... Hinting at Additional Hikes

[Anchor]
 
A short while ago, the U.S. Federal Reserve raised its benchmark interest rate by 0.25 percentage points, shifting back to a tightening stance for the first time in 3 years and 2 months. Out of 19 FOMC members, 16 projected that interest rates by the end of the year will be higher than they are now, raising the strong possibility of another hike within the year.

For our first news today (the 17th), New York correspondent Kim Hyunwoo has the report.

[Reporter]

As widely expected by the market, the U.S. Federal Reserve raised its benchmark interest rate by 0.25 percentage points.

The Fed announced following today's meeting that it decided unanimously to set the benchmark interest rate between 3.75% and 4%.

Having frozen interest rates for five consecutive times this year, the Fed pulled out the rate-hike card for the first time since Kevin Warsh took office as Fed Chair, and for the first time in about 3 years.

Chair Warsh explained that while the U.S. economic growth rate and unemployment rate remain solid, inflation is the problem, emphasizing that price stability is the top priority behind the rate increase.

[Kevin Warsh / Chair, U.S. Federal Reserve : The clear fact is that inflation is too high and has remained in that state for too long.]

The Fed also hinted that it could raise interest rates one more time this year.

Among the 19 Fed members who stated their individual projections for the year-end interest rate, the vast majority answered that rates should be raised one more time.

With the U.S. rate hike, the interest rate gap with South Korea has widened to 1 percentage point.

New York stock indices, which had been on an upward trend prior to the Fed's announcement, turned downward after Chair Kevin Warsh repeatedly emphasized in his press conference that inflation remains high, ultimately closing lower across all three major indices.

[Nicole Bashaw / Labor Economist : Because the interest rates that businesses must bear when raising additional funds or expanding their operations also go up, companies inevitably face a heavy burden.]

In addition, the yield on the 10-year U.S. Treasury note rose following the rate-hike announcement, once again surpassing the psychological resistance level of 5%.

(Photo: Yonhap News) (Video by Lee Hee-hoon, Video Editing by Kim Jin-won)
※ Please note: This article was translated by AI and may contain errors.