The Bank of Korea (BOK) raised the US interest rate in May and announced industrial restructuring with a $95 billion tightening diagnosis in August due to strong austerity in the sale of mortgage-backed securities (MBS) in the second half of the year.
The Wall Street Journal predicted on the 25th that, according to an expert survey, Korea's GDP growth rate in the first quarter was 0.6% compared to the previous quarter, a drop in half from 1.2% in the fourth quarter of last year.
The Bank of Korea's Foreign Investment Management Agency announced on the 25th that the US Fed's evaluation report confirmed the quantitative tightening (QT) and interest rate hikes for May, and US investment banks will implement them immediately.
Regarding the scale of the austerity measures, the Foreign Investment Management Agency started at 25 billion to 30 billion dollars in May and rapidly increased, to 95 billion dollars (US$60 billion in government bonds, $35 billion in MBS) reported in the minutes of the Federal Open Market Committee (FOMC) around July and August. This was expected.
At the inauguration ceremony on the 21st, Lee Chang-yong, governor of the Bank of Korea, said, "Fiscal policy and structural reform must be carried out together." , in the Bank of Korea's industrial restructuring, "We must not commit a nuisance who is hesitant to switch to a new horse because the racehorses that ran well in the past are tired and not the same as before, but we should not be caught up in the past and be hesitant to switch to a new horse." “The time has come to boldly change the frame of Korea’s economic policy,” he said. The private sector should promote more creative and qualitative growth. Exports and supply chains that are concentrated in a small number of industries and countries also need to be diversified.”
In its World Economic Outlook on the 19th, the IMF said, “The war is spreading widely in commodity markets such as energy and agriculture, as well as in trade and finance. Inflation will remain elevated for much longer than before as bottlenecks for some items continue until next year.”
The US grew 1.0% in the first quarter of this year (compared to the previous quarter), a sharp decline from the 6.9% growth in the fourth quarter of the previous year.
President-elect Yoon Seok-yeol told the Wall Street Journal on the 24th, "The role of the government is not to intervene or direct the market." He described the Yongsan office as 'People's House'.