Holiday Hit by 'Deep Seek Shock'... Bank of Korea "Closely Monitoring Domestic Impact"

Korea Economic Daily

Summary

The Bank of Korea stated that it is closely monitoring the impact of increased volatility in the U.S. stock market during the holiday period on the domestic market.
The Federal Open Market Committee (FOMC) results did not have a significant market impact, but uncertainties remain regarding the timing of the Fed's rate cuts and the new administration's economic policies.
Concerns about overinvestment by major big tech companies and uncertainties in tariff policies have strengthened global risk aversion sentiment.

*Yoo Sang-dae, Deputy Governor of the Bank of Korea. Photo=Joint Coverage Group*

On the 31st, Yoo Sang-dae, Deputy Governor of the Bank of Korea, stated, "During the holiday period, volatility in the U.S. stock market significantly expanded, particularly in the information technology (IT) sector, and we must closely monitor its impact on the domestic market."

Deputy Governor Yoo mentioned this during a market situation review meeting, saying, "The results of the recent Federal Open Market Committee (FOMC) were evaluated as expected, so the market impact was not significant," yet he added this remark.

He further added, "Given the high level of uncertainty regarding the timing and pace of the Fed's rate cuts, the economic policies of the new U.S. administration, and domestic political situations, we will cautiously monitor the development of related risk factors and their impacts."

According to the Bank of Korea, while the impact of monetary policy decisions by major countries, including the Fed, was limited during the holiday period, global risk aversion sentiment strengthened due to concerns about overinvestment in artificial intelligence (AI) by major big tech companies and uncertainties related to the new U.S. government's tariff policies.

Shin Min-kyung, Hankyung.com reporter radio@hankyung.com