The U.S. Federal Reserve raised its benchmark interest rate from 3.5%-3.75% to 3.75%-4%, expanding the gap with South Korea’s 3% policy rate to 1 percentage point. The Bank of Korea will decide at a Monetary Policy Board meeting on the 22nd of next month whether to follow the Fed or hold rates steady based on domestic economic conditions. Either option carries economic risks: a hike would increase loan costs for households and businesses, while a pause could intensify pressure on the won and push up the won-dollar exchange rate. The Fed’s unanimous decision by 12 committee members has also prompted speculation about another increase before year-end. Analysts cited in the report said persistent inflation, strong demand, loose financial conditions and oil prices above 100 dollars could keep pressure on rates, investment, consumption and the currency elevated.