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Economic chiefs see limited domestic impact from latest U.S. rate cut

Published: 18 Sep. 2025, 12:12

Finance Minister Koo Yun-cheol, second from left, speaks during a meeting of senior economic policymakers in Seoul on Sept. 18. [YONHAP]

Korea's top economic policymakers said Thursday the latest interest rate cut by the U.S. Federal Reserve is expected to have a limited impact on the domestic economy.

The remarks were made during a macroeconomic policy meeting chaired by Finance Minister Koo Yun-cheol, according to the Ministry of Economy and Finance. The meeting was also attended by Bank of Korea Gov. Rhee Chang-yong and the heads of the Financial Services Commission and the Financial Supervisory Service.

On Wednesday, the Fed lowered its benchmark interest rate by 25 basis points, the first rate cut since December and also the first under the Donald Trump administration.

The central bank also signaled the possibility of two additional rate reductions within the year amid growing political and economic pressure to support growth.

The participants assessed that the domestic impact will likely remain limited as the United States appears to be maintaining a dovish stance on monetary policy, the ministry said in a press release.

They pledged to continue working closely together to ensure stable macroeconomic and financial market management, the ministry added.

The officials also agreed to enhance interagency communication and cooperation to closely monitor key risk factors, including developments in ongoing tariff negotiations with Washington.

Yonhap