Home > Business > Economy

Uncertainty over U.S. monetary policy deepens amid Middle East crisis: BOK

Published: 19 Mar. 2026, 13:02

U.S. Federal Reserve Chair Jerome Powell speaks to reporters following the Fed’s decision to leave interest rates unchanged at the Federal Reserve in Washington on March 18. [EPA/YONHAP]

Uncertainty over the path of U.S. monetary policy has deepened amid heightened tensions in the Middle East, a senior official at Korea's central bank said Thursday.

On Wednesday, the Federal Reserve kept its benchmark interest rate unchanged at the 3.5 to 3.75 percent range for the second consecutive time, while maintaining its projection of one rate cut this year.

At a press conference following the decision, Fed Chair Jerome Powell said the surge in oil prices has increased inflationary pressures, signaling a cautious stance on the timing of further rate cuts.

"Following the outcome of the Federal Open Market Committee meeting, uncertainty over the Federal Reserve's monetary policy path has increased further, while external risk factors, including ongoing instability in the Middle East, continue to persist," Bank of Korea (BOK) Deputy Gov. Yoo Sang-dai said while presiding over a market assessment meeting.

"We will remain on high alert and closely monitor the development of both internal and external risk factors and their impact on the markets and the economy," Yoo said, vowing to take "timely market stabilization measures" if necessary.

Yonhap