Federal Reserve interest rate hike probability rises to 66% for September

Market expectations for a US Federal Reserve interest rate hike in September have risen sharply. According to CME FedWatch data, the probability of a 25-basis-point increase has climbed to approximately 66%, a significant jump from the 36-40% range seen just one week prior.

This shift follows hawkish signals from Fed official Kevin Warsh during the Jackson Hole Economic Symposium, where he emphasized that further action may be necessary if inflation does not move sufficiently toward the 2% target. Rising energy prices have also fueled concerns regarding renewed inflationary pressure.

In South Korea, the KOSPI is expected to face increased volatility in September due to these US monetary policy uncertainties, upcoming third-quarter corporate earnings, and the approaching US midterm elections. While US tightening concerns and geopolitical risks pose challenges, analysts suggest that strong corporate profit outlooks, particularly in the semiconductor and non-semiconductor sectors, may provide support for the domestic market.