Acting Deputy Prime Minister Lee Hyoung Il convened a Meeting on Macroeconomic and Financial Stability[1] with related institutions on June 19 at the Korea Federation of Banks building. The meeting reviewed recent developments in global financial markets and the impact on Korea’s financial and foreign exchange (FX) markets following the U.S. Federal Open Market Committee’s (FOMC) decision early this morning (KST) to hold interest rates steady, and discussed future plans.

The following are the remarks by Acting Deputy Prime Minister Lee.

[Outcomes of the June FOMC Meeting: Market Reactions and Assessment]

At the FOMC meeting overnight, the U.S. Federal Reserve (Fed) decided to leave the policy rate unchanged for the fourth consecutive time, keeping the upper bound at 4.5%. It also maintained its projection for a 50 basis point rate cut within this year.

In contrast, alongside the Fed’s economic projections pointing to a sharper rise in inflation, the outlook for interest rate cuts beyond next year has been scaled back.

At the press conference, Chair Powell noted that the impact of tariff policy remains highly uncertain, emphasizing the need for caution in adjusting monetary policy until the effects of such measures become clearer.

In the early hours of today, global financial markets broadly viewed the outcome of the meeting as being in line with expectations, with U.S. Treasury yields fluctuating within a narrow range.

[Future Policy Directions]

The airstrike by Israel on Iran has heightened volatility in commodity prices and global financial markets.

The domestic financial markets continue to show relative stability. Equity prices have been on an upward trend since the end of May, and financing conditions, including corporate bond issuance, have remained sound.

However, the USD/KRW exchange rate has exhibited increased volatility amid growing caution in the market.

The government stays vigilant and closely monitors related developments, maintaining a 24-hour monitoring system[2], while ensuring timely responses through close coordination among agencies based on contingency plans as necessary.