Base Rate Raised by 0.25%p Amid Inflation Pressures... Signaling Additional Hikes

[Anchor]
 
A short while ago, the U.S. Federal Reserve raised its benchmark interest rate by 0.25 percentage points, returning to a rate-hike stance for the first time in 3 years and 2 months. Among the 19 FOMC members, 16 expect interest rates to be higher than current levels by the end of the year, pointing to a high likelihood of another hike within this year.

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

[Reporter]

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

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

Having frozen 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 in about three 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 hike.

[Kevin Warsh / U.S. Federal Reserve Chair: The plain fact is that inflation is too high and it has stayed too high for too long.]

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

Among the 19 Fed members, 18 shared their individual expectations for the year-end interest rate level, and the vast majority of them responded that rates need to be raised one more time.

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

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

[Nicole Bachaud / Labor Economist: Businesses inevitably feel the burden because the interest rates they must pay when raising additional funds or expanding their businesses also go up together.]

In addition, the yield on the 10-year U.S. Treasury note rose following the rate-hike announcement, crossing back above 5%, which is considered a psychological resistance level.

(Camera Reporter: Lee Hee-hoon, Video Editor: Kim Jin-won)
※ Please note: This article was translated by AI and may contain errors.