Bank of Korea Notes Increased Uncertainty in U.S. Monetary Policy After Fed Chair Transition

The Bank of Korea stated that uncertainty over the future path of U.S. monetary policy has increased under the next Federal Reserve chair, amid rising oil prices and inflation.

The U.S. central bank held its benchmark interest rate steady for the third consecutive time at its rate-setting meeting on Wednesday U.S. time, according to the Bank of Korea. The decision involved four officials dissenting, the highest number of dissents at a single meeting since 1992.

The meeting was the last presided over by Federal Reserve Chair Jerome Powell, who is set to be replaced by Kevin Warsh following a full Senate confirmation vote next month. Ryoo Sang-dai added that uncertainty regarding the U.S. monetary policy path is assessed to have increased further following the upcoming inauguration of the next Fed chair.

He also stated that concerns exist about the potential persistence of the war in the Middle East due to difficulties in negotiations between the U.S. and Iran. The Bank of Korea indicated it will closely monitor developments of domestic and external risk factors and their financial and economic impacts, and respond promptly when necessary.