Korean Bonds Rise to Two-Week High as Yellen Damps Fed Rate Bets
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South Korea’s government bonds rose to a two-week high after Federal Reserve Chair Janet Yellen damped prospects of a U.S. interest rate increase before mid-year.
Yellen repeated in her second day of testimony to U.S. lawmakers Wednesday that inflation and wage growth remain too low to warrant raising key rates at the central bank’s next meeting, and the Fed’s timetable is flexible. Higher U.S. rates reduce the allure of emerging-market assets. South Korea’s household debt surged to a record last year, Bank of Korea said Thursday. Unprecedented borrowings have kept the BOK from cutting its benchmark rate from a record low of 2 percent.