Anchor: The U.S. Federal Reserve announced that it was holding its key interest rate steady for the fourth straight time as it waits for indications that inflation is easing before going for a cut. The decision maintains the record two-percentage-point gap for the Bank of Korea. 
Tom McCarthy has the details.

Report: The U.S. Federal Reserve met market expectations with the decision to hold its key interest rate steady at five-point-25 to five-point-five percent for the fourth consecutive time on Wednesday.

In a press briefing after a meeting of the Federal Open Market Committee, Fed chair Jerome Powell explained the decision.

[Sound bite: US Federal Reserve Chairman Jerome Powell] 
"The committee decided at today's meeting to maintain the target range for the federal funds rate at five and a quarter to five-point-five percent, and to continue the process of significantly reducing our securities holdings. We believe that our policy rate is likely at its peak for this tightening cycle, and that if the economy evolves broadly, as expected, it will likely be appropriate to begin dialing back policy restraint at some point this year."

The chairman also indicated that rate cuts will likely not come in March as the central bank waits for evidence that inflation is nearing its two-percent target range.
 
[Sound bite: US Federal Reserve Chairman Jerome Powell]
“The committee does not expect that it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward two percent."

The Fed’s decision maintains the largest-ever two-percentage-point gap with the Bank of Korea’s rate, which has remained frozen at three-point-five percent for a year, inciting concerns of capital outflow as investors may seek larger returns with higher interest rates.

With the U.S. bank’s move, Seoul’s recently appointed finance minister, Choi Sang-mok, warned that uncertainties surrounding rate cuts in other major economies have now increased.

Addressing an economy meeting after the Fed’s announcement, the minister pledged to remain vigilant to market reactions now that expectations for an early cut to the U.S.' key rate have tempered.

Choi noted that the domestic financial and foreign exchange markets have been relatively stable but still face risks from policy changes in other countries, pledging to manage the situation with contingency plans.
Tom McCarthy, KBS WORLD Radio News.