Something Scarier Than the Current Decline: The 4.25% Interest Rate Scenario We Must Prepare For
There's something scarier than the current decline... The interest rate '4.25%' scenario we need to prepare for now | Hong Seonae, Park Byeongchang, MP Partners CEO [Yeouido Insight]
Speakers
Park Byeong-chang
— Director, MP Partners
Summary
Park Byeong-chang, CEO of MP Partners, walks through a cautious September market setup driven by Fed/rate uncertainty and US 10-year yield pressures. He outlines KOSPI range levels, advises holding cash, and warns about a potential 4.25% base-rate scenario that could stress corporate credit. Despite the macro risk, he keeps AI and government-led policy sectors as core long-term themes.
- September is treated as an uncomfortable, uncertainty-heavy period rather than a crash setup.
- Park recommends holding more cash or reducing trading because he assigns about 30% probability to a Fed hike.
- KOSPI support is 6,100, resistance is 7,500, with 6,600 as the key 20-day moving average.
- US 10-year Treasury yield at 4.81% is seen as targeting 5%, with policy response likely soon.
- A scenario of two Fed hikes to 4.25% is viewed as a serious risk for corporate debt and lower-tier cloud companies.
- Samsung Electronics and SK Hynix are given target/exit levels near the KOSPI 7,500 scenario.
- AI cycle and government-led policy sectors including power infrastructure and secondary batteries remain the core long-term themes.
Ideas
Hold more cash into September uncertainty.
September is expected to be uncomfortable because the calendar is loaded with Fed/FOMC uncertainty, Korean Chuseok holiday liquidity risk, and geopolitical tensions; the only real potential positive catalyst would be US-Iran peace, which is not happening. Park puts the chance of a Fed rate hike at about 30 percent and recommends risk management by holding more cash or reducing trading, rather than aggressive positioning. He expects a slow grind rather than a crash, and cash preserves optionality to buy later.
Hold more cash into September uncertainty.
September is expected to be uncomfortable because the calendar is loaded with Fed/FOMC uncertainty, Korean Chuseok holiday liquidity risk, and geopolitical tensions; the only real potential positive catalyst would be US-Iran peace, which is not happening. Park puts the chance of a Fed rate hike at about 30 percent and recommends risk management by holding more cash or reducing trading, rather than aggressive positioning. He expects a slow grind rather than a crash, and cash preserves optionality to buy later.
Watch US 10Y 4.8-5.0 policy response.
The US 10-year Treasury yield reaching 4.81% is a warning. Park says 4.8% is already very high relative to lower global growth, and the market now interprets it as targeting 5%. He sees bond-market attackers or supply-driven sellers pushing yields higher and expects US Treasury/Fed authorities to respond soon because they cannot ignore it. Until they act, yields can push higher; once measures appear, yields may fall and equities may rebound. The 4.8-5.0 zone is the key monitoring line.
Sell Samsung/SK Hynix near target supply.
In a KOSPI rally to 7,500, Park sees Samsung Electronics around 290,000-300,000 KRW and SK Hynix around 1,950,000-2,000,000 KRW, where heavy supply is likely. He specifically advises SK Hynix holders who bought at 210,000-220,000 to accept about a 10% loss and sell near 200,000, using the rebound to raise cash rather than waiting for their original entry price.
Sell Samsung/SK Hynix near target supply.
In a KOSPI rally to 7,500, Park sees Samsung Electronics around 290,000-300,000 KRW and SK Hynix around 1,950,000-2,000,000 KRW, where heavy supply is likely. He specifically advises SK Hynix holders who bought at 210,000-220,000 to accept about a 10% loss and sell near 200,000, using the rebound to raise cash rather than waiting for their original entry price.
US equities supported by expanding M2.
Park says the simplest way to judge the US market is whether money is entering or leaving. US M2 is still expanding, and the administration is planning more spending before the election. In a market with money still being injected, the US equity market does not collapse. That explains why the US remains relatively stable and shows sector rotation rather than a broad breakdown.
Avoid risky corporate credit into hikes.
If the Fed hikes twice and the base rate reaches 4.25%, Park sees mortgage rates potentially reaching 8-9% and corporate bond issuers being forced to pay much higher coupons, eventually causing a blow-up. He believes large US hyper-scalers and big tech would be too big to fail, but lower-tier 'neo-cloud' type companies could default first and trigger a chain reaction in capital markets. This is the real systemic credit risk if rates keep rising.
Own AI cycle into agentic AI.
One of the two core themes remains the AI cycle. Park argues the market has moved from generative AI to inference and is now transitioning toward agentic AI, which has barely begun and still requires regulatory and institutional changes. This rollout will create new products and services, and investors should track which sectors and companies sit at the center of the agentic-AI buildout. AI server revenue doubling year-on-year is evidence of real demand.
Policy sectors offer distressed upside.
The other core theme is government-led policy. Korea is pushing governance reform and mega clusters, while the US is pushing multiple policies including power infrastructure and secondary batteries. These policy-favored sectors continue to fall now, but Park sees that distress as an opportunity: if the market becomes riskier, buying these beaten-down policy sectors can produce 2-3x returns, with danger creating the entry opportunity.
Up Next
This 3PRO TV (삼프로TV) video, published September 02, 2026, features Park Byeong-chang discussing CASH, EWY, US10Y, 005930.KS, 000660.KS, SPY, US High-Yield Corporate Bonds, AI server / agentic AI cycle, Korea power infrastructure, Korea secondary batteries. 9 trade ideas extracted by AI with direction and confidence scoring.
Speakers: Park Byeong-chang · Tickers: CASH, EWY, US10Y, 005930.KS, 000660.KS, SPY, US High-Yield Corporate Bonds, AI server / agentic AI cycle, Korea power infrastructure, Korea secondary batteries