U.S. Fed keeps interest rates steady and signals rate hikes are "unlikely"

美, 금리 5.25~5.50%로 6연속 동결 "금리인상 가능성은 낮다"
The Federal Reserve keeps its benchmark interest rate steady for the sixth session in a row, citing a struggle to bring inflation down, while the Fed chair Jerome Powell downplayed prospect of rate hikes this year.
Our correspondent Moon Hye-ryeon starts us off.
The U.S. central bank froze interest rates for the sixth consecutive time as inflation continues to persist.
Following the latest Federal Open Market Committee meeting on Wednesday, benchmark interest rates in the U.S. remain in the 5-point-2-5 and 5-point-5 percent range.
This latest decision comes as recent data showed that the consumer price index jumped by 3-point-5 percent in March compared to the same month the year before --prompting Fed officials to keep rates high.
The Fed's preferred core inflation gauge in the same month --the Personal Consumption Expenditures price index excluding food and energy --also rose by 2-point-8 percent on-year.
With stalled progress towards its target goal of bringing inflation down, it's increasingly likely that the central bank will maintain its restrictive monetary policy as it seeks "greater confidence" that inflation is coming down.
“But inflation is still too high. Further progress in bringing it down is not assured, and the path forward is not certain. We are fully committed to returning inflation to our 2 percent goal."
But the Fed also ruled out the possibility of a rate hike in the next meeting in June, with a resilient U.S. job market which saw an average of 276-thousand payroll job gains per month in the first quarter of the year and low unemployment rates.
Following the Bank of Korea’s decision last month to maintain its benchmark interest rate, the rate gap between the two countries remains at its highest ever at 2 percentage points.
South Korea's consumer price index for April was up by 2-point-9 percent on-year --dropping to the 2 percent range for the first time in 3 months.
With inflation still above the BOK's target, and the South Korean won still fluctuating against the greenback amid tensions in the Middle East, pundits predict that the country's central bank will also freeze its rates at the monetary policy meeting taking place on the 23rd of this month.
At a macroeconomic meeting headed by the country's finance minister on Thursday, related agencies pledged to work closely together in this time of economic uncertainties.
Moon Hye-ryeon, Arirang News.
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2024-05-02, 12:00 (KST)