BofA (BAC.N) holds a constructive view on loan growth in H2.

A July 7-13 survey of 37 economists shows the Bank of Korea is expected to deliver its first policy-rate increase in more than three years on Thursday, July 16, raising the benchmark to 2.75% (36 of 37 respondents). June CPI rose to 3.2% YoY, a two-and-a-half-year high and the fourth month above the BOK’s 2% target; respondents expect H2 inflation to average about 3%, supporting a tightening cycle. Strong Q1 growth (near six-year highs), rising house prices and elevated household debt were cited as creating scope for rate increases. Governor Shin said higher oil prices linked to the Middle East conflict will keep inflation above target for some time, making a rate hike necessary. In a subset of 31 respondents, 28 expect an additional hike by end-Q4 taking the rate to 3.00%; one expects 3.25% and two expect rates to remain at 2.75%. The survey median projects the policy rate at 3.25% in Q1 2027 and held at least through end-2027, 25bps above the May survey.

Fed Chair Kevin Warsh said an external working group will first share its findings with policymakers.