Shin Echoes Fed Concerns Over Rate Hike Amid Inflation Fears

Bank of Korea Governor Shin Hyun-song has expressed concerns over the potential for a rate hike by the US Federal Reserve in September. Speaking at the Jackson Hole meeting, where Fed Chairman Kevin Wash made his debut, Shin stated that Wash's comments were 'very different' from those made in July and suggested a rate increase was likely in September.

Wash emphasized that inflation is too high, having exceeded the target for 65 months, and that interest rates are the primary policy tool. This stance was seen as a shift towards raising interest rates, which Shin welcomed as 'a message that the market wouldn't normally welcome, but I was relieved to accept it positively.'

Shin also addressed concerns over the Fed's use of a dot plot, which shows the expected path of future interest rates. He stated that he is not opposed to the concept, but rather wants to see more nuance in its application, saying 'I'm trying to look into the micro phenomenon at the central bank with a microscope.'