<Anchor> There
has been a forecast that interest rate hikes may begin next year in the US. Inflation is rising so steeply that it is one year earlier than originally expected, but the New York stock market plunged on fears of an early interest rate hike.
Correspondent Kim Jong-won from New York.
<Reporter> The
prospect of an early rate hike came out of the mouth of a member of the Federal Reserve, the central bank of the United States.
Louis Federal Reserve Bank President James Bullard said inflation was rising too steeply and predicted that interest rate hikes would begin as early as the end of next year.
[James Bullard/St. Louis Federal Reserve Bank President: I think the rate hikes will start at the end of 2022. I think the inflation rate will exceed the target of 3% this year and 2.5% next year.] The
Fed previously predicted that it would raise interest rates twice at the end of 2023, but it was one year earlier than that.
It was particularly noteworthy that Governor Bullard, who had been one of the leading doves within the Fed, who favored monetary easing, suddenly turned to hawkish emphasis on monetary tightening.
[James Bullard/St. Louis Federal Reserve Bank President: I think it's natural for us to be called 'hawkish' to ease inflationary pressures.]
New York stocks reacted sensitively to a series of early signs of tightening.
The Dow fell nearly 1.6% from yesterday (18th), the S&P 500 fell 1.3% and the Nasdaq fell 0.9%.
However, there are voices opposing the early interest rate hike, saying that the inflation will be temporary.
Another Fed member, the governor of the Federal Reserve Bank of Minneapolis, argued to the contrary that interest rates should not be raised until 2023.
(Video coverage: Lee Sang-wook, video editing: Park Sun-sun)