Choo vows vigilance even as Fed holds rates steady

Finance Minister Choo Kyung-ho, second from right, at a meeting with financial regulators in central Seoul Thursday. [MINISTRY OF ECONOMY AND FINANCE]

The Federal Reserve's decision to keep rates unchanged was in line with market expectations, Finance Minister Choo Kyung-ho said Thursday.

The latest "decision is seen as not deviating much from government and market expectations," Choo noted in a meeting with financial regulators.

"But since uncertainties remain on the future path of monetary policy of key countries, like the United States, the government will thoroughly monitor the financial markets inside and outside the country with high alert and strengthen supervision over weaknesses."

The U.S. Federal Reserve's Federal Open Market Committee (FOMC) held rates steady at a meeting for the first time in 15 months on Wednesday.

A unanimous vote of the FOMC left the federal funds rate at the existing target range of between 5 and 5.25 percent.

"We have raised our policy interest rate by five percentage points, and we've continued to reduce our security holdings at a brisk pace," Fed Chair Jerome Powell said during a press conference following the rate decision. "We've covered a lot of ground, and the full effects of our tightening have yet to be felt,"

But he warned that "nearly all committee participants view it as likely that some further rate increases will be appropriate this year."

The announcement came as inflation continues to fall.

The U.S. consumer price index in May rose at the slowest pace on year since March 2021.

Inflation was 4 percent that month, and consumer prices were up 0.1 percent on month.

BY JIN MIN-JI [jin.minji@joongang.co.kr]