The Trigger Accelerating Interest Rate Hikes is Exactly 'This' | Jeon Gyuyeon, Research Fellow, Hana Securities Research Center, Global Investment Analysis Department

Summary

Jeon Gyuyeon, a research fellow at Hana Securities, discusses the latest FOMC meeting and its implications. He explains why the Fed's stance is hawkish, driven by persistent inflation and a still-solid US economy. The conversation covers oil's price floor near $70 due to slow supply normalization, silver's unattractiveness amid rising rates, and the positive outlook for US equities supported by the AI cycle and resilient consumer spending.

• The FOMC was hawkish, with the dot plot signaling more rate hikes and a majority of members supporting tightening.
• Fed Chair Powell is trying to reform the framework, but internal dissent and leadership challenges may slow changes.
• Oil prices have fallen to around $75–76 on expectations of Hormuz blockade easing, but the floor is near $70 as normalization will take months and inventories must be drawn down.
• Silver is viewed as unattractive: rising real rates will keep a lid on precious metals, and the speaker recommends selling if one bought near $84.
• The US economy remains positive: the upper-tier consumer is strong, the AI cycle is early, and GDP growth was only slightly revised lower.
• Labor market data, especially JOLTS job openings, is the key indicator to watch as an improvement could accelerate rate hikes.
• The balance sheet reduction (QT) is expected to continue, which may be used as a tool to curb inflation without raising rates further.