Regarding the US Federal Reserve's (Fed) increase in its policy rate (benchmark rate) by 0.25 percentage points (p), the Bank of Korea assessed today (4th), "With this decision, it appears that the Fed's interest rate hike cycle is nearing the end stage."

Han made this analysis after holding a "Market Situation Review Meeting" at 8 a.m. today presided over by Vice Governor Lee Seung-heon to examine the impact of the Fed's Federal Open Market Committee (FOMC) regular meeting on international financial market conditions and domestic financial and foreign exchange markets.

However, Lee added, "It's also worth noting that Fed Chairman Jerome Powell has stated that he will decide rates based on future economic data and has denied the possibility of a rate cut later this year."

"Uncertainty about the future monetary policy path remains large, with the divergence between the Fed's stance on the possibility of a shift in policy stance by the end of the year and market expectations persisting, and market wariness about U.S. bank jitters is still there," he said.

He added, "Going forward, we will closely monitor changes in monetary policy expectations of major countries such as the Fed and ECB (European Central Bank) and the situation of financial stability as volatility in domestic and international financial markets may increase."

At the FOMC regular meeting held on February 2-3 (local time), the US Federal Reserve raised its benchmark interest rate target range by 4.75 percentage points from 5.00-5.00% to 5.25-0.25% as expected.

(Photo = Courtesy of Yonhap News TV, Yonhap News)