Total of 3 hikes expected? Rate hikes have a long way to go | Park Jun-woo, Research Fellow at Hana Securities Research Center

Summary

Park Jun-woo of Hana Securities Research Center argues the Fed is not restrictive enough and expects additional rate hikes, with one more this year and another next March. He views the dot plot as hawkish and sees higher long-run neutral rates supporting bond yields. He has turned more cautious on risk assets because oil-driven inflation and tightening risk could trigger a 5-10% S&P 500 correction, but he still sees equity upside after that correction. He also thinks oil's further upside is limited.

• Fed hiked and Park expects further increases, including one more this year and another next March.
• He argues policy is not sufficiently restrictive because inflation is not anchored and growth remains strong.
• The 2027 dot plot is described as hawkish, with higher long-run neutral rate projections.
• Oil is identified as the main driver of recent equity weakness and higher yields.
• He sees limited further upside in oil after its rally.
• He is more conservative on risk assets and sees a 5-10% S&P 500 correction risk.
• After that correction, he still expects equity upside, comparing the setup to 1997.
• He advises watching market pricing rather than Fed political commentary.