US Stock Futures Hold Steady as Soft Inflation Data Eases Fed Rate Hike Fears 
RBA Minutes Signal Australia Central Bank Remains Ready to Raise Interest Rates if Inflation Persists 
South Korea Raises Interest Rates to 2.75% as Inflation and Weak Won Drive Tightening 
Gold Price Holds Near Record High as Cooling U.S. Inflation Offsets Fed Caution 
Asian Stocks Rally as Cooling U.S. Inflation Boosts Fed Rate Cut Hopes 
Oil Prices Climb as Trump Escalates Iran Pressure, Strait of Hormuz Risks Grow 
China Home Prices Fall Again in June Despite Slower Pace of Decline 
ECB's Kocher Says No Inflation Spillover Yet From Iran Conflict, Warns Risks Remain 
RBNZ Raises Interest Rates to 2.50%, Signals More Tightening as Inflation Risks Persist 
BOJ May Raise Japan Growth Forecast While Keeping Focus on Inflation Risks 
Gold Prices Slip as Oil Rally Fuels Inflation Fears, Strengthens Dollar 
Malaysia Central Bank Moves to Support Ringgit Amid Foreign Fund Outflows 
Denmark Central Bank Intervenes to Support Krone Peg Against Euro 
The Bank of Korea (BOK) is widely expected to lower its benchmark interest rate by 25 basis points to 2.50% on May 29, marking its first cut since 2022. This anticipated move comes as South Korea’s economy shrank 0.2% in Q1 and inflation remains close to the BOK’s 2.0% target, sitting at 2.1% in April. A stronger Korean won, which has rebounded around 9% from recent lows, has further supported expectations for monetary easing.
All 36 economists surveyed by Reuters between May 19 and 25 predicted a rate cut, aligning with signals from BOK Governor Rhee Chang-yong during the April policy meeting. Analysts noted that weak GDP data, U.S. tariff uncertainties, and the falling USD/KRW exchange rate reinforce the need for a policy shift.
Looking ahead, 23 of 27 economists forecast the policy rate will fall further to 2.25% by the end of Q3. Additionally, 56% of respondents expect another 25 basis point cut by year-end, bringing the rate to 2.00%.
Besides monetary stimulus, economists anticipate increased fiscal support, especially following the June presidential election. This follows the approval of a 13.8 trillion won ($10.1 billion) supplementary budget earlier this month.
Kathleen Oh, chief Korea economist at Morgan Stanley, suggested that once rates hit 2.00%, the central bank may focus on financial stability while shifting the responsibility for economic growth to the government starting next year.
A separate Reuters poll showed South Korea’s 2025 GDP growth is expected at 1.3%, slightly above the IMF’s 1.0% estimate, though economists predict the BOK will revise its 1.5% growth forecast downward this week.
