Posted on 08/26/2021 9:15:14 AM PDT by BenLurkin
The hottest debate among economists and investors is when central banks will back away from pandemic-era policies. After months of ambiguity, they finally have an answer — at least from South Korea.
What's happening: The Bank of Korea raised its base interest rate from 0.5% to 0.75% on Thursday.
The move is aimed at reining in inflation, a red-hot real estate market and high levels of household debt, which the central bank decided were more worrying than a spike in coronavirus cases.
Citi's economists are penciling in another Bank of Korea rate hike in November and two more next year.
South Korea, for its part, is making the choice that economic activity is resilient enough at this point to intervene.
The Bank of Korea is definitely ahead of the curve. While the Federal Reserve could start slowing down purchases of bonds this year, officials don't expect to start hiking interest rates until 2023.
But as the Fed's top brass gather for their high-profile conference Friday, they'll face similar considerations: Given the ongoing strength of the economy, when is the right time to change course?
(Excerpt) Read more at wthitv.com ...
... and so it begins
Ping
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.