It's time now for an in-depth look at the global markets this afternoon, and for that, I'm joined on the line by Dr. Hwang Seiwoon, research fellow at the Korea Capital Market Institute. Dr. Hwang, thanks for coming on today. You're welcome. It seems there's a little uncertainty about whether or not the Federal Reserve will be cutting interest rates this year aggressively. And that sent Wall Street a little lower on Tuesday. Korean stocks today also sharply lower. What's the story out there? In Wall Street, stocks edged lower on Tuesday as quarterly results from banks added to concerns about lower interest rates dampening their profits, while comments from U.S. President Donald Trump on trade also dragged down Wall Street’s major indexes. The S&P 500 closed 0.34% lower, while the Nasdaq fell 0.43%. Stocks moved lower after Trump said there was a long way to go with China on trade and threatened to put tariffs on another $325 billion of Chinese goods. The major indexes briefly pared losses after Federal Reserve Chair Jerome Powell reiterated that the central bank would “act as appropriate” to keep the U.S. economy humming, but they later moved back to their previous levels. Asian shares drifted off on Wednesday as anxious investors awaited more earnings reports from corporate America, while the dollar held firm in the wake of robust U.S. retail data and a Brexit-driven dive in the pound. Japan’s Nikkei eased 0.51% and South Korea’s KOSPI lost 1.01%, while Chinese blue chips dipped into the red. Tomorrow the Bank of Korea will be meeting to decide on interest rates. Some analysts think the BOK might cut rates sooner rather than later in view of the Japan export situation. What do you think? The Bank of Korea is under growing pressure to lower its key interest rate after U.S. Federal Reserve Chairman Jerome Powell strongly hinted at a rate cut later this month. I expect the BOK is likely to lower the benchmark rate in August at the latest if the Fed cuts its policy rate this month. The Korean central bank is scheduled to have rate-setting monetary policy committee meetings, July 18 and Aug. 30. The central bank does not have a lot of options now if the Fed lowers its rate this month. Two of the BOK's Monetary Policy Committee members have continuously mentioned the necessity of a rate cut. Korea's growth rate has also been underrated by a number of global rating agencies. However, the BOK seldom adjusts its policy rate before the Fed’s impending monetary policy decision. The BOK is more likely to lower the policy rate after the uncertainty on the Fed’s decision is removed. Japan has proposed having a third party mediate in this trade dispute, and it wants an answer by tomorrow, but the Blue House says it's not going to be able to respond by then. Korean businesses are worried about a possible second round of retaliatory trade measures from Japan. What might that look like, if it happens? As the second round of economic retaliation by Japan
