Asian markets were mixed as the Bank of Korea held firm again; Hong Kong stocks are at a two-month low

The Bank of Korea kept its benchmark interest rate for the third time in a row at 3.50% on Thursday.

The decision came in line with the unanimous expectations of economists polled by Reuters, which expected the central bank to stop.

The central bank governor earlier this month told CNBC that it was “premature” to discuss a rate cut, citing inflation rates in the country that remain above the Bank of Korea’s 2% target.

South Korea is scheduled to release its consumer price index for May on Friday.

Indonesia’s central bank is expected to maintain the 7-day reverse repo rate at 5.75%, according to economists polled by Reuters.

Economists also expected the central bank to keep the deposit facility rate at 5.00% and the lending rate at 6.50% as well.

The move would mark a third consecutive halt for Bank Indonesia, as the country recorded an inflation rate of more than 4% in April. The nation releases its inflation rate for May next month.

South Korea’s producer price index rose 1.6% year-on-year in April, down from the 3.3% rise in the previous month.

Government data showed That month, the country’s producer price index fell 0.1% after seeing a 0.1% growth in March.

The producer price index is a measure of the change in the prices that domestic producers receive for their goods and services.

The South Korean won weakened 0.11% on Thursday morning to 1319.66 against the US dollar.

– Jihe Lee

The Fed’s meeting minutes showed “uncertainty” from participants about whether it will raise interest rates for the 11th time at its meeting in June.

According to the minutes, there appear to be two camps in the Fed now. One group, which included “some” members, said that progress in reducing inflation had been “unacceptably slow” and would require further hikes. The other, backed by “many” FOMC members, saw a slowdown in economic growth as “more policy firmness may not be necessary after this meeting.”

The minutes do not identify individual members nor do they define “some” or “several” with specific numbers. However, in Fed parlance, “some” is thought of as more than “several.”

To sum up, the minutes showed that the Fed will closely monitor the incoming data to decide whether to raise interest rates again on June 14th.

– Jeff Cox, John Milloy

Correction: In Fed parlance, “some” is thought of as more than “several.” An earlier version misinterpreted the difference.

Federal Reserve Governor Christopher Waller, responding to a three-pronged question facing US central bankers, said it was too early to make the right choice. He said data in the coming weeks ahead of the June 13-14 meeting would determine the correct course.

While Waller insisted the Fed would need to “remain flexible” on whether it should raise interest rates, pause them, or skip June with a tendency to hike rates in July, he expressed skepticism that the Fed is gone. To far as it needs to be in the fight against inflation. .

“I don’t expect the data coming in over the next couple of months to show that we’ve reached the final rate,” Waller said in prepared remarks for a speech in Santa Barbara, California.

“And I’m not in favor of halting interest rate hikes unless we get clear evidence that inflation is heading lower towards our 2% target. But whether we raise or skip the June meeting will depend on how the data arrives over the next three weeks,” he added.

– Jeff Cox

House Speaker Kevin McCarthy reiterated that negotiators must reach a decision on the debt ceiling even as lawmakers struggle to agree on essential spending.

“We will not default,” he said during a news conference Wednesday. “We’re going to work this out. I’m going to stay with her until we can get it done. But let’s be honest about this. We should have spent less than we did last year. It’s not my fault the Democrats can’t keep up on their spending.”

Samantha Sobin, Sarah Maine

Reuters quoted an informed source as saying that negotiators from both sides are expected to meet again on Wednesday morning.

Stocks fell on Tuesday after negotiators for President Joe Biden and House Speaker Kevin McCarthy appeared not to be making much progress in talks that day.

It could take a week for any deal to be written and passed through Congress, the Reuters report said, raising the stakes for a deal in the next two days before the June 1 deadline for a default from the Treasury Department.

– John Milloy