[Morning Briefing] Trump: "South Korea brings proposal to lower tariffs"... US benchmark interest rate kept on hold for 5th meeting

◆Trump: "Meeting with South Korean negotiation delegation today"

Donald Trump, the President of the United States, announced on his social media today, "I will meet with the South Korean trade delegation." Trump stated, "I am scheduled to meet with the South Korean trade delegation this afternoon," adding, "South Korea is currently subject to a 25% tariff, but they have brought a proposal to reduce that tariff." With Koo Yoon-cheol, South Korea's Deputy Prime Minister for Economic Affairs, and US Treasury Secretary Scott Besant set to hold their final working-level negotiations on the 31st (local time), a day before the tariff negotiation deadline, Trump declared in advance that he would personally meet the South Korean negotiation delegation at The White House. Lee Kyu-yeon, Senior Secretary of Public Communications at the Presidential Office, mentioned that an emergency briefing may be held depending on the outcome of the meeting.

◆ US interest rate held for 5th consecutive time at 4.25~4.50%

The Federal Reserve held the benchmark interest rate steady at 4.25~4.50% at the Federal Open Market Committee (FOMC) meeting held early this morning. This marks five consecutive holds since the launch of the Trump administration. The Korea-US interest rate gap will remain at 2.0 percentage points at the upper limit. However, unlike the unanimous decision last June, opinions were divided in this round. Nine committee members, including Fed Chair Jerome Powell, supported holding the interest rate. However, Board Member Michelle Bowman and Vice Chair Christopher Waller argued for a 0.25 percentage point cut and voted against the hold. President Trump has been pressuring for a rate cut on the grounds of alleviating the burden of national debt interest and boosting the economy.

◆ New York Stock Exchange ends mixed as rate cut fails to materialize

Overnight, the New York Stock Exchange finished mixed after the failure to lower the benchmark interest rate. At the New York Stock Exchange early this morning, the Dow Jones Industrial Average and Standard & Poor’s (S&P) 500 Index each fell by 0.38% and 0.12% compared to the previous trading day. Only the NASDAQ Composite Index rose by 0.15%. With the Federal Reserve keeping the benchmark interest rate at 4.25~4.50% and Chair Powell making hawkish remarks such as "there is still a long way to go before we fully understand how inflation will play out," investor sentiment was dampened.

◆ Lee Sang-min’s detention warrant review today for ‘press blackout order’

A substantive examination of the arrest warrant for Lee Sang-min, the former Minister of the Interior and Safety, who is suspected of ordering power and water cuts at press outlets during the martial law declaration on December 3, will be held at 2 PM today at the Seoul Central District Court. Former Minister Lee is facing charges of participating in seditious activities, abuse of authority, and perjury. The Special Prosecutor has requested a warrant for his arrest on the 28th, stating that as the Minister of the Interior and Safety, the main government office in charge of martial law, he aided the declaration and played a key role in ordering the power and water cuts at press agencies. Former Minister Lee denied all charges during previous special prosecution interviews.

◆ Heatwave continues across the country... daytime highs up to 37°C

Today, Thursday, a heat warning remains in effect nationwide, and hot weather is expected to continue. By 9 AM, a few drops of rain (< 0.1mm) may fall in the Seoul Capital Area, southern Chungcheong region, North Jeolla Province, and North Gyeongsang Province. There will also be rain during the morning hours in Jeju, the northern Yeongseo region of Gangwon Province, and the western coastal area of South Jeolla Province. Maximum daytime temperatures are forecast to be between 31 and 37°C. Peak perceived temperatures are expected to reach around 35°C across the country, resulting in very hot conditions. The fine dust concentration is expected to range from ‘good’ to ‘moderate’ levels nationwide thanks to efficient atmospheric dispersion.

Noh Jeong-dong, Hankyung.com journalist dong2@hankyung.com