2026 First FOMC: The Fed Was Watching 'This' Rather Than Rates | Professor Joo Hyun-soo, Korea Financial Training Institute

Summary

The interview reviews the first 2026 FOMC, where the Fed held rates and emphasized a well-balanced economy. The guest, Professor Joo Hyun-soo, expects no rate cut before May and sees only moderate odds of a June cut, while highlighting stabilizing employment but weakening consumer confidence. He points to AI capex as a new US growth driver and warns of a K-shaped consumer with severe low-income credit stress. The discussion ends with the Bank of Korea likely holding rates due to won weakness, real estate, and household debt.

• Fed held rates at the first 2026 FOMC, citing a well-balanced inflation and employment backdrop.
• Guest expects no rate cut before May, with June first-cut odds around 40%.
• US employment is stabilizing, but consumer confidence and retail sales are weakening.
• Low-income delinquencies and credit card account closures are at severe levels, showing a K-shaped economy.
• AI-related capex is a major support for US growth and offsets some consumer weakness.
• Tariffs and elevated PPI may pressure corporate margins if cost pass-through fails.
• Bank of Korea likely to hold rates due to won weakness, real estate, and household debt.
• Fed independence and data reliability risks remain in focus.