Fed Holds Interest Rates Steady; Fed Chair Expresses Keen Interest in South Korean Economy

[Anchor]

Overnight, the U.S. Federal Reserve kept its benchmark interest rate unchanged. However, considering the timing of the midterm elections and inflation rates, the market expects a rate hike in December to be likely. During his press conference, Fed Chair Kevin Warsh also mentioned that he is paying close attention to the South Korean economy.

Reporting from New York, this is correspondent Kim Hyunwoo.

[Reporter]

As widely anticipated, the U.S. Federal Reserve decided to maintain its benchmark interest rate at the current level between 3.75% and 4%.

This follows a pause to catch its breath after raising the benchmark rate by 0.25 percentage points last month for the first time in three years.

The Fed stated that while inflation remains high, it will determine its policy direction after gathering more information.

Driven by soaring oil prices in the wake of the Middle East conflict, the inflation rate significantly exceeds the Fed target of 2%.

[Kevin Warsh / Chair, Federal Reserve: Inflation has been exceeding our target for nearly six years. It is our responsibility to bring inflation under control.]

During the press conference, Chair Warsh also made remarks regarding the South Korean economy.

[Kevin Warsh / Chair, Federal Reserve: I pay much more attention to the South Korean economy than people might think, because a significant portion of the core materials required for new technology investments comes from South Korea and Japan.]

Warsh emphasized that next week's midterm elections did not influence the outcome of this meeting and also signaled a change starting next year, stating that the number of rate-setting meetings will be reduced.

As the rate freeze was largely expected, major New York stock indices closed slightly higher with little volatility.

[Eric Lynch / Executive, Suncoast Equity Management: With the midterm elections approaching, I think Fed officials did not want to influence the election.]

At this rate-setting meeting, two of the 12 voting members cast dissenting votes against the rate freeze, advocating for a 0.25 percentage point increase.

Given that the Fed hinted at the possibility of an additional hike within the year when it raised rates last month, market observers expect that rates could be raised again in December, when the final meeting of the year takes place.

(Camera reporting: Lee Hee-hoon, Video editing: Cho Moo-hwan)
※ Please note: This article was translated by AI and may contain errors.