00:00President Trump pressed the Fed to cut rates. The Fed raised them instead.
00:04This clash will move your portfolio, the one, even the Bank of Korea.
00:07It all started with the Iran war this February.
00:10As Middle East tensions dragged on, oil prices surged, and higher fuel costs stoked inflation across the board.
00:17In the end, the Fed raised its benchmark rate by a quarter point to a range of 3.75%
00:23to 4.00%.
00:25It's the first hike in three years and two months, since July 2023.
00:30What matters more is what comes next.
00:32On the dot plot, where each Fed official marks a rate forecast, 16 of 18 respondents see one more hike
00:38this year.
00:39That's a strong signal. A further hike is likely before year end.
00:42President Trump pushed back immediately.
00:44He said U.S. rates should be 1% or lower, and the White House officially called it a very
00:49regrettable decision.
00:51Fed Chair Warsh held firm. He countered that it was the right call to fulfill the Fed's congressional mandate.
00:58Markets reacted harshly.
00:59Wall Street turned lower at 2 p.m. when Warsh's hawkish remarks came out.
01:04The Dow fell more than 1.2% and big bank stocks tumbled over 3%.
01:08The 10-year Treasury yield broke above 5% again.
01:12When Treasury yields rise, so does the discount rate, shrinking the present value of corporate earnings.
01:18Converted at today's rates, the same profits are worth less, so share prices fall.
01:22The more debt a growth company carries, the bigger the hit.
01:27Korea's KOSPI closed slightly lower at 6,715.
01:31With the hike already priced in, the damage was limited.
01:34But the one weakened to 1,382 per dollar.
01:38A weaker one lifts import prices, fueling inflation at home again.
01:42The Bank of Korea is now more likely to act, too.
01:46After back-to-back hikes in July and August, its base rate stands at 3.00%.
01:51With the U.S.-Korea rate gap widening to 1 percentage point, pressure for another hike is building.
01:57But given the strain on vulnerable households and non-bank delinquencies among multiple debtors,
02:02most expect the hike in November, not October.
02:05In theory, rate hikes widen interest margins for financials.
02:09But remember, big bank stocks actually fell in New York that day.
02:13Short-term price moves and longer-term earnings outlooks can diverge.
02:17Instead of sector rules of thumb, check each company's debt structure and earnings sensitivity first.
02:23Three numbers to remember today.
02:25U.S. benchmark rate, 4%.
02:2710-year treasury yield, 5%.
02:30$1 rate, 1,382.
02:33Which way these three move before the next FOMC is the key signal for your Q4 portfolio.
02:38Don't get swept up in fear.
02:40Use these numbers to decide within your own risk tolerance.
02:42Don't get swept up in fear.
02:42For more information, visit www.fema.gov
