[Today's News] US Rate Freeze and Hints of Further Hikes Push Exchange Rate Past 1,515 Won

2026-06-18

The U.S. Federal Reserve has frozen its benchmark interest rate, but domestic and international financial markets are in significant turmoil as it hinted at the possibility of additional hikes. Domestically, free safety inspections to prevent electric vehicle fires are being expanded to include buses and motorcycles, while military tensions between the U.S. and Iran are also escalating.

The Federal Reserve (Fed), the U.S. central bank, decided to maintain the benchmark interest rate at 3.50–3.75%. However, as members of the Federal Open Market Committee (FOMC), the rate-setting body, displayed a "hawkish" (favoring monetary tightening) stance by suggesting further rate hikes in the future, all three major New York stock indices closed lower. In the aftermath, the KRW-USD exchange rate soared to 1,515.50 won in overnight trading. With the outlook that interest rates could remain high for longer than expected, the burden on household loans and inflation is expected to persist.

U.S. President Donald Trump stated that a memorandum of understanding (MOU) could be signed with Iran, but warned that he might resort to bombing if negotiations fail over the next 60 days. These negotiations are set to address Iran's ballistic missile issues. President Trump said that energy flows would normalize within a few days, but he continued to apply strong pressure by mentioning military action in the event of a breakdown in talks.

The Ministry of Land, Infrastructure and Transport will conduct free safety inspections for electric buses and electric motorcycles starting this year to prevent electric vehicle fire accidents. This measure is intended to ensure safe driving during the summer, and the scope of inspections has been expanded as new electric vehicle registrations recently surpassed 100,000 units. Through these inspections, EV users can check the safety of major components, such as batteries, free of charge.

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