The US Federal Reserve's indication of a potential rate cut has opened the door for the Bank of Korea to also consider reducing its interest rates, as concerns about growing household debts and currency instability persist. Following the US Fed's decision to maintain its benchmark rate within a range of 5.25 to 5.5 percent, Chair Jerome Powell suggested that a rate reduction could be on the horizon if the US economy aligns with expectations. This news led to a strengthening of the Korean won against the US dollar and bolstered the performance of Seoul shares, with the Kospi closing higher and the Kosdaq also showing gains. The sustained interest rate gap of 2 percentage points between Korea and the US, coupled with easing inflationary pressure, has prompted speculation that the Bank of Korea may soon initiate a rate cut. While the country's consumer prices have remained relatively stable, concerns about surging household debts and fluctuations in the global financial market continue to influence the BOK's monetary policy. Analysts anticipate a potential rate cut by the BOK in the coming months, with a focus on mitigating the impact of inflation rather than solely preventing an economic downturn. Local authorities remain cautious as they navigate the uncertainties surrounding the timing and extent of potential rate adjustments, while also monitoring risks related to financial stability, housing prices, and market volatility.