strategies, the nps must consider not only micro - level aspects but also the macroeconomic impact on the foreign exchange market, ensuring an optimal portfolio strategy that accounts for these broader effects. the decision to hold the policy rate steady in august 2024 4 / 6 bis - central bankers'speeches next, i will explain the background behind the decision to hold the policy rate steady in august this year, as the second case of applying an ipf to monetary policy. looking at domestic and external conditions at the time, inflation was showing signs of stabilization in many countries, including in korea, creating sufficient conditions to adjust the degree of monetary tightening. in fact, some advanced economies had already started to reverse their policy stance, lowering interest rates ahead of korea. in particular, as expectations of a pivot at the federal reserve rose significantly, domestic market interest rates had already dropped faster and more substantially, even though the bok had not yet begun to reverse its monetary policy stance. this over - anticipation of interest rate cuts led to a preemptive easing of domestic financial conditions beyond what was intended. following this, from august onward, the previously subdued rise in household debt and real estate prices accelerated sharply, and financial imbalances began to expand. the monetary policy board assessed that, while conditions for an interest rate cut were developing in the real economy - such as inflation and private consumption - there were growing concerns that an interest rate cut would fuel rising real estate prices and exacerbate financial imbalances. therefore, it was deemed more prudent to recommend to the government that it strengthen macroprudential policies and to observe their effects before making any rate cuts, leading to the decision to keep the policy rate steady in august. another factor in the decision to hold the rate steady was that, despite sluggish domestic demand, economic growth was still projected to exceed the economy's potential growth at that time. the high level of household debt itself does not necessarily imply a risk to the financial system, as household debt is typically backed by collateral. more importantly, however, the economy's heavy reliance on real estate distorts resource allocation by expanding the credit supply to non - productive sectors like real estate, which could act as a constraint on consumption and growth in the medium to long term. korea's disproportionate focus on real estate within the household and financial sector balance sheets, compared to other countries, requires appropriate measures to mitigate this imbalance and credit misall

number enrolled in school, and those who may lack the necessary skills or face other barriers to taking jobs. the rise in the average workweek since early 1996 suggests employers are having increasingly greater difficulty fitting the millions who want a job into available job slots. if the pace of job creation continues, the pressures on wages and other costs of hiring increasing numbers of such individuals could escalate more rapidly. to be sure, there remain an additional 34 million in the working - age population ( age 16 - 64 ) who say they do not want a job. presumably, some of these early retirees, students, or homemakers might be attracted to the job market if it became sufficiently rewarding. however, making it attractive enough could also involve upward pressures in real wages that would trigger renewed price pressures, undermining the expansion. thus, there would seem to be emerging constraints on potential labor input. even before we reach the ultimate limit of sustainable labor supply growth, the economy ’ s ability to expand employment at the recent rate should rapidly diminish. the availability of unemployed labor could no longer add to growth, irrespective of the degree of slack in physical facilities at that time. simply adding new facilities will not increase production unless output per worker improves. such improvements are possible if worker skills increase, but such gains come slowly through improved education and on - the - job training. they are also possible as capital substitutes for labor, but are limited by the state of technology. more significant advances require technological breakthroughs. at the cutting edge of technology, where america finds itself, major improvements cannot be produced on demand. new ideas that matter are hard won. the economic outlook as i noted, the recent performance of the labor markets suggests that the economy was on an unsustainable track. unless aggregate demand increases more slowly than it has in recent years - - more in line with trends in the supply of labor and productivity - - imbalances will emerge. we do not know, however, at what point pressures would develop - - or indeed whether the economy is already close to that point. fortunately, the very rapid growth of demand over the winter has eased recently. to an extent this easing seems to reflect some falloff in growth of demand for consumer durables and for inventories to a pace more in line with moderate expansion in income. but some of the recent slower growth could simply be a product of abnormal weather patterns, which contributed to a first - quarter surge in output and weakened the