KIC Discusses US Interest Rate Outlook with Korean-American Financial Experts in New York: "Likely to Decrease from March"

BofA Forecasts Soft Landing for US Economy This Year
Consumption, Investment, Government Spending, and Inflation All Slow Down
Interest Rate Cuts Expected from March... 1%P Decrease by Year-End

Korea Investment Corporation (KIC) announced that it held the 8th "New York Korean Finance Forum" on the morning of the 25th (local time) at the New York Consulate General, hosted by its New York office. More than 20 investment officers from the government, public investment institutions, securities firms, banks, and insurance companies attended, including the Financial Attach? of the Embassy of the Republic of Korea in the United States. KIC, which has overseas offices in global financial hubs such as New York and San Francisco in the U.S., London in the U.K., and Singapore, is striving to share information with local institutions and build a cooperative system for overseas investments.

The meeting began with a presentation by Mark Cabana, U.S. interest rate strategist at Bank of America (BofA) Securities. He predicted that "the U.S. economy will achieve a soft landing this year, with the economy gradually slowing down." The economic growth rate for this year is expected to be around 1.2%, down from the previous year's forecast of 2.7%. He anticipated a moderate slowdown in most sectors, including consumption, investment, and government spending. Inflation is also expected to gradually decline, stabilizing at around 2.5% by the end of the year based on the Core Personal Consumption Expenditures (Core PCE) index. Accordingly, the U.S. Federal Reserve (Fed) is expected to cut the benchmark interest rate by 1 percentage point from March through the end of the year.

However, strategist Cabana noted, "It will be difficult for the Fed to cut rates as quickly as the market expects," adding, "The market will experience significant volatility due to the speed difference between market expectations and actual rate cuts." He advised that if market interest rates rise amid increased volatility, it could present a buying opportunity for undervalued bonds.

Lee Kyung-taek, head of KIC’s New York office, said, "Amid ongoing uncertainty surrounding the direction of interest rates, this was a meaningful occasion to review investment strategies for this year," and added, "We will continue to provide opportunities for Korean finance professionals in New York to gather and exchange opinions." The KIC New York office plans to hold the "New York Korean Finance Forum" nine times this year to facilitate networking among Korean finance professionals in New York.

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