Former U.S. Treasury Secretary Lawrence Summers said on Monday that the Federal Reserve’s rate hike may not be over yet, despite the recent decision to keep the benchmark lending rate steady between 5.25 and 5.50 percent. Summers argued that the economy is currently performing well and the current rate levels are not significantly restrictive.
He predicted that the Fed would not raise its policy rate in December, but added that the idea that the Fed is finished with rate increases is “overstated” in the markets. Summers went on to say that the neutral real interest rate is now between 1 1/2 and two, and the term premium will be 100 to 150 basis points going forward.
South Korea’s central bank also held its key interest rate steady at 3.5 percent for the sixth straight time last month. This followed seven consecutive rate hikes from April 2022 to January 2023.
Former Treasury Secretary Lawrence Summers is seen on the right of the screen during a video conference with Bank of Korea Gov. Rhee Chang-yong (PHOTO NOT FOR SALE). (Yonhap)
sam@yna.co.kr
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