{"id":2208171,"date":"2025-01-31T08:00:51","date_gmt":"2025-01-30T23:00:51","guid":{"rendered":"https:\/\/koreapro.org\/?p=2208171"},"modified":"2025-01-30T15:43:10","modified_gmt":"2025-01-30T06:43:10","slug":"fed-holds-rates-steady-putting-south-korea-in-a-bind","status":"publish","type":"post","link":"https:\/\/koreapro.org\/2025\/01\/fed-holds-rates-steady-putting-south-korea-in-a-bind\/","title":{"rendered":"Fed holds rates steady, putting South Korea in a bind"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">The U.S. Federal Reserve kept its benchmark interest rate <\/span><a href=\"https:\/\/www.federalreserve.gov\/newsevents\/pressreleases\/monetary20250129a.htm\"><span style=\"font-weight: 400;\">unchanged<\/span><\/a><span style=\"font-weight: 400;\"> at 4.25 to 4.5% after its latest Federal Open Market Committee meeting, pausing after three consecutive rate cuts in late 2024. Fed Chair Jerome Powell said the central bank sees no urgency to adjust monetary policy, emphasizing that inflation remains somewhat elevated and that the economy continues to expand at a solid pace. The Fed also removed previous language suggesting inflation was nearing its 2% target, signaling a cautious approach to future rate cuts.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The decision comes days after President Donald Trump demanded immediate rate reductions, arguing the Fed had mishandled inflation. Powell noted that the Fed is closely watching fiscal, trade and regulatory policy changes under the new administration.<\/span><\/p>\n<p><b>WHY IT MATTERS<\/b><\/p>\n<p><span style=\"font-weight: 400;\">The Bank of Korea (BOK) now faces a tighter window for rate cuts as the Fed signals a slower easing path. A <\/span><a href=\"https:\/\/koreapro.org\/2025\/01\/south-koreas-central-bank-freezes-key-rate-as-won-faces-growing-volatility\/\"><span style=\"font-weight: 400;\">1.5 percentage point gap<\/span><\/a><span style=\"font-weight: 400;\"> between U.S. and South Korean rates has kept pressure on the South Korean won, limiting the BOK\u2019s flexibility. While Governor Rhee Chang-yong hinted at further easing in January, aggressive cuts could accelerate capital outflows and weaken the currency. The BOK is still expected to lower rates in February, but additional rate cuts beyond that will likely be restrained.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Morgan Stanley\u2019s new forecast of <\/span><a href=\"https:\/\/koreapro.org\/2025\/01\/morgan-stanley-slashes-south-koreas-2025-growth-outlook-to-1-5\/\"><span style=\"font-weight: 400;\">1.5% GDP growth<\/span><\/a><span style=\"font-weight: 400;\"> for South Korea in 2025 highlights worsening economic conditions despite two BOK rate cuts last year. The global investment bank warned that weak consumer spending, slowing exports and external headwinds will keep the recovery fragile.<\/span><\/p>\n<div class=\"content-tags\"><a href=\"https:\/\/koreapro.org\/tag\/business-economy\/\"><span class=\"tag\">Business &amp; Economy<\/span><\/a><\/div>","protected":false},"excerpt":{"rendered":"<p>The U.S. Federal Reserve kept its benchmark interest rate unchanged at 4.25 to 4.5% after its latest Federal Open Market Committee meeting, pausing after three consecutive rate cuts in late 2024. Fed Chair Jerome Powell said the central bank sees no urgency to adjust monetary policy, emphasizing that inflation remains somewhat elevated and that the [&hellip;]<\/p>\n","protected":false},"author":10407,"featured_media":2208172,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[30],"tags":[24],"class_list":["post-2208171","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-briefings","tag-business-economy"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Fed holds rates steady, putting South Korea in a bind - Korea Pro<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/koreapro.org\/2025\/01\/fed-holds-rates-steady-putting-south-korea-in-a-bind\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Fed holds rates steady, putting South Korea in a bind - Korea Pro\" \/>\n<meta property=\"og:description\" content=\"The U.S. Federal Reserve kept its benchmark interest rate unchanged at 4.25 to 4.5% after its latest Federal Open Market Committee meeting, pausing after three consecutive rate cuts in late 2024. 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