The Federal Reserve (Fed) in the United States decided to freeze the benchmark interest rate again on the 19th (local time). Amid rising concerns over President Donald Trump's tariff policy as a significant variable in the global economy, the Fed emphasized the uncertainty of economic forecasts.
The Fed announced that it decided to maintain the benchmark interest rate at the existing 4.25% to 4.50% following the conclusion of the two-day Federal Open Market Committee (FOMC) meeting. This marks the second consecutive freeze since Jan. 29.
The FOMC stated, "Recent indicators suggest that economic activity has continued to expand at a robust pace," adding that "the unemployment rate has stabilized at a low level over the past few months and the labor market remains strong," while also noting that "inflation is somewhat elevated."
It further stated, "The committee is working to achieve maximum employment and 2% inflation in the long term," before noting that "the uncertainty surrounding economic forecasts has increased."
The economic uncertainty mentioned by the FOMC is interpreted as concerns about a potential recession and slowing growth, as well as rising prices due to the tariff policy extensively promoted by President Trump.
With this decision by the Fed, the interest rate gap between Korea (2.75%) and the United States remains at 1.75 percentage points based on the upper range.
In the Summary of Economic Projections (SEP), the Fed projected the year-end benchmark interest rate (median value) to be 3.9%, suggesting that there will be two rate cuts of 0.25 percentage points each by the end of the year.