Son Min

Rafael Bostic, President of the Federal Reserve Bank of Atlanta "Companies absorbing tariffs have reached their limit; prices expected to rise gradually" Governors Waller and Vice Chair Bowman support a rate cut in July Rafael Bostic, President of the Federal Reserve Bank of Atlanta, stated that while American companies have so far been absorbing tariffs, they are likely to start reflecting tariffs into prices by the end of this year. He emphasized that the labor market remains stable and that the Fed does not need to rush a rate cut. According to Reuters on the 23rd (local time), Bostic told Reuters in an interview that the Fed has “time and breathing room” to observe tariffs and other policy debates. He projected that economic growth could slow to about 1.1% this year and that inflation could rise to 3% by year-end. Based on this outlook, he believes that a single 0.25% point rate cut at the end of the year would be appropriate. While President Trump continues to pressure the Fed to lower rates, Christopher Waller, a member of the Board of Governors, and Michelle Bowman, the Fed's Vice Chair for Supervision, have both commented that a rate cut in July is possible. However, Bostic said, “I am more concerned about failing to achieve the 2% inflation target than about potential weakness in the labor market,” indicating that the risk of a rebound in inflation outweighs any employment downturn. He added, “By the final quarter of this year, we should have enough information to make a move.” Bostic noted that with the Trump administration delaying what would have been the highest tariffs in a century, recent business sentiment has improved somewhat. Chairman Powell also mentioned this in a press conference last week. Bostic commented that "corporate leaders have lowered the probability of a doomsday scenario where tariffs and prices surge and demand collapses," and that management teams are formulating strategies to address tariffs. He said that these strategies include gradually raising prices. He pointed out that U.S. companies are running out of options to maintain prices, and that "it looks like they will have to raise prices." The issue is not "whether" to raise prices, he said, but rather "when." Although Bostic does not have a vote on rates this year, like all Fed officials, he participates in Federal Open Market Committee (FOMC) discussions. This week's congressional hearings are expected to focus on Fed policy, with Jerome Powell, the Fed Chair, scheduled to testify before the House Financial Services Committee on the 24th and 25th. While President Trump has called for an immediate rate cut, lingering uncertainties surrounding trade and other policies have led the Fed to take a cautious stance, and the current geopolitical uncertainties in the Middle East could further intensify this approach. If Trump’s reciprocal tariff exemptions for most countries expire on July 8, the resulting tariff policies or bilateral agreements could still create inflationary pressures for U.S. prices. Guest Reporter Jung-A Kim kja@hankyung.com

Former U.S. President Donald Trump stated that Israel would not attack Iran. On the 24th (local time), President Trump wrote on Truth Social, "Israel will not attack Iran," adding, "All fighter jets will turn around and return to their home country, and will make a friendly flying gesture (Plane Wave) toward Iran." He further emphasized, "No one will get hurt, and the current ceasefire is valid." However, some reports state that Prime Minister Benjamin Netanyahu rejected President Trump's request to cancel the attack. Walter Bloomberg said, "According to U.S. media outlet Axios, Israeli Prime Minister Benjamin Netanyahu rejected U.S. President Donald Trump's request to cancel the airstrike on Iran," adding, "Israel attacked Iranian targets, and it was confirmed that the jets are returning to Israel." It was reported that Prime Minister Netanyahu maintained that retaliation for violation of the ceasefire is necessary. Meanwhile, President Trump is known to have requested Prime Minister Netanyahu to refrain from any attacks on Iran.

Donald Trump, former President of the United States, issued a warning regarding Israel's suggested forceful response. On the 24th (local time), Trump wrote on Truth Social, "Israel should not drop bombs on Iran," stressing, "If they do so, it would be a major (ceasefire agreement) violation." He further added, "Recall the pilots immediately." Trump's warning appears to be in response to Israel’s announcement of a tough reaction, citing Iran's breach of the ceasefire. Previously, Israel Katz, Minister of Defense of Israel, stated, "Iran has violated the ceasefire agreement," and added, "I have ordered a high-intensity strike targeting central Tehran (the capital of Iran)." Eyal Zamir, Chief of the Israel Defense Forces (IDF), also said, "The Iranian regime has gravely violated the ceasefire. We will respond with force." Meanwhile, according to CNN, the IDF revealed: "Following the ceasefire, we detected Iran’s missile fire toward northern Israel and intercepted two missiles."

Iranian media outlets and senior security officials have denied allegations of an Iranian missile launch. According to CNN on the 24th (local time), Iranian media denied the Israeli claim of a ceasefire agreement violation. Iran's ISNA news agency stated, "The reports claiming Iran launched missiles after declaring a ceasefire are not true," and the state-run Nour News also denied the missile launch. In addition, it was reported that a senior security official also denied this claim. According to the media, the Iranian senior security official said in an interview conducted after 12 a.m. Eastern Standard Time, "There has not yet been a missile launch against the enemy," and added, "If Israel makes a mistake, we will attack every area just as we did an hour before the war stopped." The media further noted, "U.S. President Donald Trump stated via Truth Social that the ceasefire would go into effect in about six hours, which corresponds to 12 a.m. Eastern Standard Time," emphasizing that the Iranian side denied the launching of missiles after the ceasefire began. Meanwhile, according to Tehran Times, a local media outlet, Iran's Supreme National Security Council (SNSC) today stated, "Despite the ceasefire, Iran does not trust promises or rhetoric from hostile forces. Iran remains on high alert and is conducting operations," adding, "We are prepared to respond swiftly and firmly to any new acts of aggression."

The Israel Defense Forces (IDF) Chief of Staff has indicated a strong response to Iran's violation of the ceasefire agreement. According to the official Israel Defense Forces Telegram on the 24th (local time), Eyal Zamir, IDF Chief of Staff, stated, "The Iranian regime has seriously violated the ceasefire. We will respond strongly." According to CNN, an Israeli military official said, "Iran fired missiles toward northern Israel," adding, "Currently, two missiles have been intercepted."

While Israel and Iran have signed a ceasefire agreement, it has been reported that Israeli Defense Minister Israel Katz ordered a strong response to Iran’s violation of the truce. According to Middle Eastern media outlet AlArabiya on the 24th (local time), Israel Katz, the Israeli Defense Minister, instructed an intense response through high-intensity strikes on targets in central Tehran (the capital of Iran) over Iran’s violation of the ceasefire. He stated, "Iran has completely violated the truce agreement," adding, "We will continue focused operations to attack Tehran." This is claimed to be due to Iran's breach of the ceasefire agreement. According to CNN, the Israel Defense Forces confirmed, "Missile attacks from Iran targeted northern Israel." The Israeli military reportedly activated defense systems to intercept, and issued evacuation orders to the public. It was found that more than two missiles had been intercepted. Accordingly, it is expected that Israel will take even stronger countermeasures. Previously, Israel stated in its first statement after the ceasefire, "Israel has eliminated threats in both nuclear and ballistic missile domains," and "We will respond firmly to any actions that violate the ceasefire agreement." Meanwhile, the ceasefire between Israel and Iran took effect this morning. U.S. President Donald Trump said, "The ceasefire has just come into effect," and warned, "Do not violate it." Bitcoin (BTC), which had been showing an uptrend on the news of the truce, also gave back some of its gains. As of 5:18 p.m., according to Binance USDT market, Bitcoin was trading at $104,640, up 2.46% from 24 hours ago.

The National Planning Committee, directly under the President, has stated that there have been no concrete discussions on the implementation of taxation on virtual assets (cryptocurrencies). Previously, the committee had mentioned an intention to expand taxation to include virtual assets in its report. According to the industry on the 24th (local time), Cho Seung-rae, spokesperson for the National Planning Committee, said during a regular briefing, "The contents included in the report are merely policy ideas, not finalized matters," adding, "It is not appropriate to consider every item as an official initiative." The related items were considered as review items prior to discussions by the Tax and Fiscal Reform Task Force (TF), and it was explained that the future priority and feasibility of these tasks would be evaluated subsequently. Spokesperson Cho remarked, "At the TF meeting to be held on the 26th, the topics and scope of discussions will be finalized," adding, "Based on those results, we will inform you again to the extent that it can be publicly disclosed." Meanwhile, virtual asset taxation is scheduled to be implemented from 2027.

The Bank of Korea's Deputy Governor has stated that won-based stablecoins should be issued primarily by banks. According to industry sources on the 24th (local time), Yoo Sang-dae, Deputy Governor of the Bank of Korea, commented at a press briefing, "I fundamentally agree with the purpose of introducing stablecoins," but added, "KRW-based stablecoins should first be issued with banks at the center." He drew attention to the potential impact of stablecoins on the macroeconomy. Deputy Governor Yoo said, "The monetary characteristics of stablecoins are considerable. They can have a significant influence on the macroeconomy overall," and added, "Since the central bank is responsible for price and financial stability on the foundation of payment settlement stability, there are concerns regarding stablecoins." He continued, "Even if stablecoins are introduced, it is desirable to first allow issuance mainly by banks that have the capacity and strict regulations, then gradually expand to the non-bank sector," explaining that a kind of safety mechanism needs to be established to prevent potential financial market disruptions and user damage arising after the issuance of KRW-based stablecoins. Accordingly, he implied that once the Ministry of Economy and Finance or Financial Services Commission is established, continuous consultations will be conducted with related ministries based on concerns, positions, and research results of the Bank of Korea. He further clarified, "Just because stablecoins are issued mainly by banks does not mean the authority of the Bank of Korea is maintained or expanded." On a personal note, he expressed a more negative view. He said, "Are there any countries where stablecoins not based on the US dollar have already been issued?" and emphatically stated, "I will boldly say that the argument that Korea should also launch stablecoins just because they have been introduced in the US is not appropriate." He added, "Does the presence of the KRW mean the dollar is not used?" and explained, "The dollar is widely dominant and used because it is considered a safe asset. I do not understand the argument that issuing KRW-based stablecoins would curb the use of dollar-based stablecoins." Despite discussions on issuing KRW-based stablecoins, the Bank of Korea plans to proceed as scheduled with the second test of the Central Bank Digital Currency (CBDC) Project Han River, which has been jointly promoted with six commercial banks. Previously, there had been speculation that phase two of Project Han River might be delayed until discussions on KRW stablecoin regulation and legislation were concluded. Deputy Governor Yoo stated, "(The delay of the second CBDC test due to KRW stablecoin issuance discussions) is not the case," and added, "We will continue to coordinate with banks on the timing and content of the second test." He further commented, "Before full-fledged stablecoin discussions, we thought deposit tokens could be used in a stablecoin-like manner," and clarified, "The argument to issue stablecoins centered on banks does not mean Project Han River's deposit tokens are being considered."

As reports emerged that Israel plans to end the war promptly, a senior Iranian official indicated that the conflict could continue for up to two years. According to CNN on the 23rd (local time), a senior Iranian official stated, "The demand from the public to attack Israel is unusually high," and, "This is a factor strengthening Iran's battle plans." He continued, "We expect the war could last up to two years. We have completed all preparations for this," adding, "The United States should take direct responsibility for this war and bear the consequences." Additionally, he said, "Any call for a temporary cessation of the war is just a ploy to assess Iran's readiness for war." Meanwhile, according to The Wall Street Journal, an Israeli government official has said they "plan to end the war with Iran soon."

The global cryptocurrency exchange Binance will be listing Newton Protocol (NEWT). On the 23rd (local time), Binance stated on its official website, "Newton Protocol has been selected for the 24th Holder Airdrop Project," and added, "The spot trading pair is scheduled to be listed on the 24th at 23:00 (KST)."

Amid Iran's move to consider blocking the Strait of Hormuz as a retaliatory response to the U.S. airstrike on Iran's nuclear facilities, former U.S. President Donald Trump issued a warning about a possible oil price surge. On the 23rd (local time), President Trump stated on Truth Social, "Keep oil prices low," and added, "I am watching closely." He continued by warning, "(A rise in oil prices) is playing into the hands of the enemy," and strongly emphasized, "Never let that happen." In addition, he instructed the Department of Energy to "start drilling. Start drilling!!! Right now, immediately." President Trump's remarks were made as concerns about a rise in oil prices grew due to Iran's threat to block the Strait of Hormuz. Previously, the Iranian parliament had approved a proposal to blockade the Strait of Hormuz as a retaliatory measure against the U.S. airstrikes on its nuclear facilities. However, the final decision is expected to depend on Iran's Supreme Leader, Ayatollah Khamenei. The Strait of Hormuz is known for enabling the passage of approximately 20% of the world's oil consumption. Currently, major investment banks expect that if the Strait of Hormuz is blocked, oil prices could exceed $100 per barrel. Meanwhile, as of the 22nd (local time), international oil prices, which had risen, partially reversed gains today, with WTI and Brent Crude closing at $75 and $78 per barrel, respectively.

The U.S. Manufacturing Purchasing Managers' Index (PMI) for June slightly exceeded forecasts. On the 23rd (local time), S&P Global announced that the Manufacturing Purchasing Managers' Index for June was 52.0, slightly above Wall Street's forecast of 51.1. S&P Global's report stated, "This month's Manufacturing PMI shows the strongest expansion in 15 months," adding, "Factory output rose for the first time in four months, and the growth rate for new orders remained solid." It continued, "One of the main drivers behind the rise in PMI is employment," noting that manufacturing employment increased at the fastest pace in 12 months. Chris Williamson, Chief Economist at S&P Global, said, "The June PMI flash indicates growth in the U.S. economy, but inflationary pressures have surged, making the outlook uncertain." He explained, "Domestic demand has driven job growth in manufacturing, but this effect could fade going forward." He also added, "The pace of cost increases due to tariffs is at its highest in three years." The Purchasing Managers' Index (PMI) uses 50 as the baseline to gauge whether the industry is expanding or contracting. A PMI above 50 indicates expansion, while a reading below 50 signals contraction. The PMI flash is released before the end-of-month final PMI and is used as an early indicator for assessing economic conditions.

The flash estimate for the United States' June Services Purchasing Managers' Index (PMI) exceeded market expectations. According to the PMI report released by S&P Global on the 23rd (local time), the final value of the US Services PMI for June was 53.1, surpassing the market expectation of 52.9. The announced services PMI index was lower than last month's final figure of 53.7, suggesting that the US service sector may have contracted compared to May. Meanwhile, PMI uses 50 as the baseline to gauge whether the service sector is expanding or contracting. The PMI flash estimate is released ahead of the month's final PMI figure and can be used as an indicator for quickly assessing economic conditions.

Chinese state media has expressed that the yuan stablecoin should be actively promoted. On the 23rd (local time), Securities Times, a publication under People's Daily, the official newspaper of the Chinese Communist Party, stated, "Stablecoins are emerging as an agenda item attracting global attention," and added, "China, which is pushing for the internationalization of the yuan, should not leave stablecoins in a regulatory blind spot." The report further noted, "Doing so would negatively impact the country's financial system and could mean missing out on the opportunity to globalize the yuan." The article particularly highlighted the fact that stablecoins serve as a powerful payment tool. It stated, "The current stablecoin market size has surpassed $250 billion. As of June this year, the number of stablecoin payment transactions has reached 1.6 billion, and the transaction volume is expected to total $730 billion," adding, "According to Citibank, the stablecoin market size is projected to reach $3.7 trillion by 2030." The article also pointed out, "Countries such as the United States, Hong Kong, and South Korea are already speeding up legislation related to stablecoins," and assessed that it would be beneficial for China to join this global trend.