The idea that the base rate hike is over is almost becoming a trend.

I'm going to start with an essay. I'm going to start with a rate hike. The idea that the base rate hike is over is almost becoming a trend. And if you look at the past pattern after the end of the rate hike, unlike the Fed's "Higher for Longer," you're going to cut the base rate in the past, and the rate cut was pretty big. Maybe that's why, as the base rate cut starts in about seven to eight months, you have to pay attention to the last base rate hike.

Well, first of all, the last time I actually met was in June of 2006 and December of 18. And the atmosphere at that time was not the time when everyone recognized and looked at it, saying, "This is the last time we're going to raise interest rates." The possibility of an additional rate hike was open. The last time, in June of 06 was when the rate hike was ... from May 10, 2006, to mid-June of 2006, you can see the financial markets, where raw material prices collapsed by close to 40 percent from their peak, and the S&P 500 was also in trouble. The fact that the U.S. stock market was not hot at all at the time makes sense that the atmosphere in the stock market was very bad. And many of you may remember that, if you look at the market in December of 2018, Santa Raleigh was missing. And since October of 2018, the New York Stock Exchange has collapsed dramatically… It was a time when there was a high possibility of a recession. And in January 2019, Powell said that the U.S. economy was in good shape, but that concerns about a slowdown in China and Europe were likely to backfire on the U.S. economy. He said that he would stop monetary tightening.

If you go before that, you're going to get to May of 2000. In May of 00, for the first time since 1994, the Big Step rate hike was done. So with a 50 basis point increase, the base rate, which was 6.0%, went to 6.5%. And the market reacts when the base rate hike, which started at 4.75% in the second half of 1999, goes up to 6.5%. And the market gets scared, reading the Fed's determined stance, predicting that it's going to go up to 7.5%. And for your information, March 10, 00 was the peak of the dot-com bubble. And since then, it's been on a sharp decline. The bottom line is that at the time of the last rate hikes in 2000, 2006, 18 years, the market mood wasn't like, today is the last day. You're graduating. Now, too many people seem to be talking about the last rate hike. And the atmosphere in the financial market is also vague, because as soon as the base rate hike is over, we're going to cut interest rates in the near future. So this is the ironic situation where we're not afraid of a hike.

In that context, a rise in market interest rates can be perceived as a boon. If market interest rates rise ... the Fed says it can stop tightening, so wouldn't that mean market rates will come down ... So, if it goes up high, the coward Fed will be scared and come back to a quick rate cut. If you play Go or play chess, there are people who are looking ahead. There seems to be quite a lot of investors who have read and bet on the number of Feds in front of them over the past decade or so. Wouldn't this make the correlation between assets look completely different from the past..

Interest rates are very heavy right now, but because there's a bright future to come, wouldn't it be hard to hold on if the perception that such a future will be delayed is bolstered? The Fed talks about "high for longer"…and further rate hikes are open…but the actual market is saying that the rate hikes will end sooner than the Fed expects…and next year's rate cuts will also be a little faster than the Fed expects. Conversely, from the beginning of the tapering in the second half of 2021, the Fed is tightening a step ahead of market expectations...and it's tightening a little bit longer and stronger than market expectations. And the Fed wants a little longer and stronger tightening than market expectations. And the market thinks of a weaker and shorter tightening than the Fed's expectations. And here's an interesting problem. The Fed moves with market expectations, and the market moves with Fed expectations. Wouldn't that be complicated…

If the market believes in the Fed's will ... the tightening is going to end sooner than expected. But if the market doesn't believe in the Fed's will ... the tightening is going to continue slower and longer than expected. And yet the market wants to cave in and take more of the blame by bringing the Fed to its knees. Last year, they took growth hostage ... but that didn't work. Now they're threatening the Fed with the stability of the financial system hostage, and that's a long way from the process. The benchmark interest rate has come up to 5.25% or 5.5% all of a sudden. And you're holding out by looking at the future where interest rates are going to come down without thinking about the current level. I think the Fed and the market are almost at the end of the battle.

The market's expectation is that if interest rates are this high, they're going to break somewhere, they're going to stop raising interest rates preemptively... the retail sales index smashed that expectation last night, and then Treasury Secretary Yellen says this.

"U.S. Treasury Secretary Yellen has no problem with interest rate hike impact... Very general" (Korea Economic TV, October 11)

"Yellen 'Don't worry about selling U.S. Treasuries'" (Union Infomax, 23.10.11)

It seems to be a very different confidence from last year. At least, isn't it like you're mentioning that stability in the financial system isn't going to be a hostage to the Fed? That's what it used to be like. If you raise interest rates, the economy will be smashed, the interest rates will come down, and if you cut rates, the interest rates will come down, so the logic is that in any case, interest rates will come down, so you can buy bonds, and by the way, you can flip it like this. If you raise interest rates, the market rates will go up. If you stop raising rates, you'll have to react with additional interest rates by re-stimulating the asset market and inflation. Anyway. Let's take a little more look at how market rates react to the intensifying battle between the Fed and the market. And it's important to note the differentiation between the United States, which can withstand high interest rates, and emerging economies, which can't. It was similar in 2018. I'll cut back on essays. Thank you.