🚨 South Korea’s central bank turns hawkish again with another rate hike! Will global tightening be reignited? How likely is the Fed to raise rates?
The Bank of Korea (BoK) announced a 25-basis-point hike to 3.00%. This is the second consecutive month of rate increases following the July hike, fully ending the previous three-year period of easing and wait-and-see expectations.
Since June, the won has strengthened against the US dollar by more than 12%. After the decision was released, the won jumped again by 0.56%.
South Korea has raised its 2026 GDP growth forecast to 3.3%, but the main triggers for the second hike are persistent inflation (still clearly above the 2% target) and concerns about overheated assets.
Does this imply the US dollar or the Fed will follow #加息 ?
No—this doesn’t necessarily mean the Fed will restart rate hikes. But it very likely signals that the Fed’s “rate-cut cycle” will be significantly delayed, and the dollar will remain at high rates for the long term (High for Longer).
If, in the future, the Fed does not maintain a tough hawkish stance or cuts rates too quickly, its interest-rate differential advantage would be eroded.
To preserve the appeal of US Treasury bonds and maintain dollar hegemony, the Fed has absolutely no chance of sharply cutting rates in the near term.
The real impact on #加密市场 (Crypto)
Asia-Pacific major economies (Japan, South Korea) are moving one after another toward tightening/hawkishness, which keeps global carry trades being unwound and tightens the marginal liquidity for global risk assets.
The market’s fantasy of an “aggressive Fed rate cut” will be completely shattered. With rates staying high for longer, there will be strong downward pressure on valuation ceilings for risk assets such as BTC/ETH.
$BTC
The Bank of Korea (BoK) announced a 25-basis-point hike to 3.00%. This is the second consecutive month of rate increases following the July hike, fully ending the previous three-year period of easing and wait-and-see expectations.
Since June, the won has strengthened against the US dollar by more than 12%. After the decision was released, the won jumped again by 0.56%.
South Korea has raised its 2026 GDP growth forecast to 3.3%, but the main triggers for the second hike are persistent inflation (still clearly above the 2% target) and concerns about overheated assets.
Does this imply the US dollar or the Fed will follow #加息 ?
No—this doesn’t necessarily mean the Fed will restart rate hikes. But it very likely signals that the Fed’s “rate-cut cycle” will be significantly delayed, and the dollar will remain at high rates for the long term (High for Longer).
If, in the future, the Fed does not maintain a tough hawkish stance or cuts rates too quickly, its interest-rate differential advantage would be eroded.
To preserve the appeal of US Treasury bonds and maintain dollar hegemony, the Fed has absolutely no chance of sharply cutting rates in the near term.
The real impact on #加密市场 (Crypto)
Asia-Pacific major economies (Japan, South Korea) are moving one after another toward tightening/hawkishness, which keeps global carry trades being unwound and tightens the marginal liquidity for global risk assets.
The market’s fantasy of an “aggressive Fed rate cut” will be completely shattered. With rates staying high for longer, there will be strong downward pressure on valuation ceilings for risk assets such as BTC/ETH.
$BTC
