The Federal Reserve Bank of the United States hinted a hike in interest rates as the Chair of the Federal Reserve, Janet Yellen, stated that the possibility of the hike has risen on the 26th of September.
The United States being one of the most stable investment sites in the world, the increase in interest rates may result in surging investment toward the USA. Invest towards the USA was low even though it was one of the safest assets in the world because it had very low interest rates. Countries with growing economies are worrying about foreign investors drawing out massive amounts of money owing to the possibility of change in interst rates.
The consequences emerged faster than anticipated in Korea with the downfall of the Korean Stock Price Index, the KOSPI, falling by 0.63% and the drastic rise of won-dollar exchange rates on the 29th of August. In America, the corporate bonds of diverse companies surged to an unprescedented level of 117 billion dollars, and the influx of money into America is also increasing consistently.
The response to whether the Fed will increase its interest rates is likely to be made in December.