Last month, the consumer price index (CPI) rose more than expected, raising the possibility that the US could raise its benchmark interest rate by 1 percentage point. The Bank of Korea’s base rate scheduled for next month is also likely to be affected.
According to the FedWatch tool of the Chicago Mercantile Exchange (CME) on the 18th, the US Federal Reserve (Fed) will raise the key interest rate at the regular meeting of the Federal Open Market Committee (FOMC) scheduled for the 20th-21st ( local time) It is expected to increase by 100 bp (1 percentage point).
According to the US Department of Labor, the US consumer price index rose 8.3% in August compared to the same month a year earlier. Although the rate of increase was slower than the 9.1% recorded in June and 8.5% in July, the increase was much higher than the market consensus (8.0%).
Accordingly, the US is likely to proceed with the Ultra Step, which raises the base interest rate by 1 percentage point at a time to curb high inflation and the pace of tightening.
Faced with the possibility of a US move higher, the Bank of Korea is also expected to take an additional ‘big step’ (a 0.5 percentage point increase in the base rate) at the Monetary Policy Committee (MoC) next month. .
Earlier, the Bank of Korea had forecast a gradual monetary policy raising the base rate by 0.25 percentage points.
However, in a situation where the pace of tightening by the US Federal Reserve is expected to be steeper than initially expected, it is difficult to rule out an additional major step such as foreign exchange market turmoil and concerns about the outflow of investment funds foreign. is growing
In addition, there is a growing possibility that the loan interest rate will exceed 8% at the end of the year on the basis of mortgage loans due to the increase in market interest rates following the BOK’s increase in the base rate.
In this regard, Lee Tae-gyu, a senior research fellow in the Department of Economic Research at the Korea Economic Research Institute, said, “It is natural for the United States to raise the base interest rate in response to the inflation shock, but the key is how much it will raise.”
“There is a possibility that the US will take the extraordinary step of raising the base rate 1 percentage point at a time, but in the long term, it is promoted in the direction of maintaining market credibility by raising the 0.75 per cent rate. rather than raising it by 1 percent,” Lee said. “Even if the Fed raises interest rates by 1%, it will be difficult to contain inflation immediately.”
“If the US raises interest rates this week, Korea will also push for an interest rate hike at a regular meeting of the Monetary Policy Committee scheduled for next month,” he said.
[ 경기신문 = 이지민 기자 ]
