US rate path uncertain amid inflation, Mideast tension: finance ministry

The path of key interest rates in the United States appears to remain uncertain due to persistent inflation and geopolitical tensions in the Middle East, the finance ministry said Thursday.

First Vice Finance Minister Lee Hyoung-il chaired discussions with officials from financial authorities, including the Bank of Korea, after the U.S. central bank kept its benchmark interest rate unchanged at a range of 3.5-3.75 percent overnight.

The decision marked the fifth consecutive pause, leaving the gap between the key interest rates of Korea and the U.S. at up to 1 percentage point.

"The participants noted that the U.S. economy is maintaining solid momentum, with business facility investment also remaining robust, led by AI-related investment," the finance ministry said.

"However, they also assessed that the rate path may remain uncertain, considering high inflation in the United States and Europe, along with geopolitical instability in the Middle East," it added.

The participants also vowed to continue monitoring the monetary policies of major countries, along with trends in global oil prices. ...