Fed rate measures weigh on key US ally
Fed rate measures weigh on key US ally
October 23, 2023, 12:02 a.m. ET
South Korea’s alliance with the United States has strengthened under the Biden presidency. But the country’s economy has been a victim of rapidly rising U.S. interest rates, showing how the Federal Reserve’s decisions – and the uncertainty surrounding them – can have repercussions around the world.
The Fed has embarked on a historic wave of interest rate hikes since the start of 2022, aiming to rein in inflation that peaked at 9.1% in the middle of last year. Central banks around the world have followed these measures, in part out of a desire to protect their currencies, which may suffer from rising Treasury yields that encourage international investors to dump their foreign assets and buy U.S. bonds.
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