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With a memorandum of understanding (MOU) on ending the war between the United States and Iran appearing imminent, interest-rate decisions from the U.S. and Japan—closely watched by global financial markets—are slated for this week. In South Korea, key inflation indicators will be released and the Bank of Korea governor will offer an assessment of recent price trends.
The U.S. Federal Reserve will hold a Federal Open Market Committee (FOMC) meeting on June 16–17 (local time) to decide whether to adjust the benchmark rate, currently at 3.5–3.75% a year. Despite inflation concerns stemming from the war in the Middle East, the market expects the Fed to hold rates steady for a fourth straight time, following pauses in January, March and April of this year.
The biggest point of interest is the message Kevin Warsh, the Fed chair who took office last month, will deliver at his first press conference after the rate decision. Attention is focused on how strongly he will speak, caught between U.S. President Donald Trump's blatant demands for rate cuts and tightening pressure from an increasingly hawkish Fed. If Warsh acknowledges the reality of inflation and the Fed members' dot-plot projections (expected future benchmark rates) rise above the March level, expectations for a rate hike within the year could gain momentum. But if Warsh assesses the recent price increases as a temporary factor driven by geopolitical shocks from the Middle East, concerns about expanded tightening could ease.
Ahead of that, the Bank of Japan (BOJ) will also hold its monetary policy meeting on June 15–16 to decide its benchmark rate. The market expects the BOJ to raise the rate by 0.25 percentage point to 1% from the current 0.75% a year, taking into account rising prices and a prolonged weak yen. Following the eurozone, which raised rates last week for the first time in three years, Japan will also enter monetary tightening mode. Japan's rate rising above 1% would be the first time in 31 years, since 1995.
In South Korea, Bank of Korea Governor Shin Hyun-song will hold a briefing on June 17 to review the operation of the inflation target and analyze recent price trends. As he has repeatedly signaled rate hikes focused on price stability, he is expected to comment on the future rate path as well.
The producer price index, due June 19, is also an important indicator. In April it jumped 2.5% (month-on-month) on higher oil and raw-material prices—the largest gain since February 1998—making a check on the trend necessary.
Attention is also drawn to the "2026 IMD World Competitiveness Ranking," to be released June 18 by Switzerland's International Institute for Management Development (IMD). The IMD competitiveness ranking, published since 1989, evaluates 20 categories across four areas—economic performance, government efficiency, business efficiency and infrastructure. Last year South Korea ranked 27th among 69 countries, down seven places from the previous year, and interest centers on whether its ranking has risen this year.
