How High Will US Interest Rates Rise? Why Money Gathers 'Here' as It Dries Up
How High Will US Interest Rates Rise? Why Money Gathers 'Here' as it Dries Up | Shinhan Securities Dr. Kim Hyojin [Global Interview]
Спикеры
Kim Hyojin
— PhD, Shinyoung Securities
Shinhan Securities Dr. Kim Hyo-jin explains why US and Japanese long-term interest rates have climbed and why they are likely to remain a burden on markets. She sees the yen carry trade as an amplifier rather than an immediate liquidation trigger and expects investors to stay cautious in equities. Despite tighter liquidity, she argues AI funding will not dry up completely, supported by the new $500B AI infrastructure financing platform, and she prefers Big Tech corporate bonds over European sovereign bonds.
- US Treasury yields are rising steadily, driven by broad inflation, fiscal deficits and war spending, and big-tech bond issuance.
- Taylor rule fair value for the 10-year Treasury is around 5.1%, with current yields near 4.9%.
- Japanese 10-year yields surged from negative or zero levels to nearly 3%, the highest since the mid-1990s.
- Yen carry trade unwinds are a volatility amplifier, though current conditions are below the 2024 episode.
- Higher rates make investors cautious, and foreign buying in Korean equities could turn to selling.
- Big Tech corporate bonds look more attractive than European sovereign bonds.
- AI infrastructure financing led by NVIDIA, BlackRock, and Goldman Sachs opens a funding route, so AI capital will stay concentrated in leaders.
Идеи
US Treasury yields likely stay elevated.
US Treasury yields are not rising from a one-off event but have been grinding higher since last year, with the 30-year near its 2007 high. The drivers are broad-based inflation, persistent fiscal deficits and war spending around 7% of GDP, and competition from big-tech bond issuance. A Taylor rule estimate puts fair value near 5.1% for the 10-year, while current levels are near 4.9%; she expects yields to keep testing that zone until bond demand near 5% caps sharp spikes.
Prefer Big Tech bonds over European sovereigns.
Because money is finite and rates are rising, Kim argues big-tech credits are fundamentally more attractive than many European government bonds: big tech earns much more and has superior growth, so if she were a forced buyer of French debt she would rather own Google corporate bonds. This supply rivalry is one reason Treasury yields are also under pressure.
Prefer Big Tech bonds over European sovereigns.
Because money is finite and rates are rising, Kim argues big-tech credits are fundamentally more attractive than many European government bonds: big tech earns much more and has superior growth, so if she were a forced buyer of French debt she would rather own Google corporate bonds. This supply rivalry is one reason Treasury yields are also under pressure.
Japanese yields surge, JGBs unattractive.
Japanese 10-year yields have surged from negative or zero levels to nearly 3%, the highest since the mid-1990s, moving far above the 0.3% average Japanese investors were accustomed to over 2015-2025. This makes money more expensive globally and leaves JGB duration vulnerable, with the speed of the move making rates especially sensitive.
Carry trade unwind risk remains amplifier.
The yen carry trade remains a key risk, but it usually amplifies selloffs rather than causing them. Current volatility in the yen and Japanese rates is still below the 2024 liquidation episode, so immediate mass unwinding is not evident, yet any abrupt yen strength would increase leveraged portfolio pain and should be monitored.
Korean equities face cautious foreign flows.
With US and Japanese rates rising, foreign inflows into Korean equities had been steady but could turn to selling. She describes the current environment as one where investors want to stay cautious and defensive rather than actively participate in equities.
AI funding persists; leaders attract capital.
The $500B AI infrastructure financing platform formed by NVIDIA, BlackRock, and Goldman Sachs opens a new route for capital, transferring AI chip and asset risk to third parties. Even as global liquidity tightens, this means AI capex is not likely to dry up completely. Investors will increasingly concentrate in AI leaders because there is no comparable ace outside AI, so leadership crowding should intensify.
Далее
This 3PRO TV (삼프로TV) video, published August 18, 2026, features Kim Hyojin discussing IEF, TLT, Alphabet corporate bonds, OAT, Japan 10-Year Government Bond, FXY, Korean equities, NVDA. 7 trade ideas extracted by AI with direction and confidence scoring.
Speakers: Kim Hyojin · Tickers: IEF, TLT, Alphabet corporate bonds, OAT, Japan 10-Year Government Bond, FXY, Korean equities, NVDA