High oil prices and high interest rates... Is it right for the market to rise like this? | Dr. Kim Hyo-jin, Shinyoung Securities

Summary

Kim Hyo-jin of Shinyoung Securities explains why markets can rise despite high oil prices and interest rates. She sees the Fed's mixed signals and a potential Warsh transition as adding uncertainty, but argues current rate levels are manageable. The oil market has structurally changed, with weak China demand muting geopolitical price shocks and fair value around $95 WTI. Korea's semiconductor exports now dwarf oil imports, supporting Korean equities, and she remains constructive on equities because earnings are strong enough to offset macro risks.

• FOMC held rates but had four dissents, creating mixed hawkish and dovish signals.
• A potential Warsh Fed may reduce press conferences and dot-plot communication, adding rate uncertainty.
• AI's near-term productivity and inflation impact is hard to prove, so the Fed remains cautious.
• Oil market structure has become more competitive, and Middle East shocks have less price impact.
• China's weak economy and soft consumption limit oil demand and upside.
• WTI fair value is estimated near $95; current levels are above fair but not economically breaking.
• Korea's semiconductor exports now far exceed crude oil imports, a structural positive for KOSPI.
• The speaker remains constructive on equities because strong earnings can offset macro headwinds.