Fed Turns Hawkish Again, Rattling Wall Street With 4.1% Rate Outlook

* Editor's note: AI PRISM (Personalized Report & Insight Summarizing Media) is an artificial intelligence-based personalized news recommendation and summary service developed with support from the Korea Press Foundation. It selects and provides six news items tailored to each reader type.

1. Korea Caught in a Dilemma After Warsh Ends the Party

- Key points: After Warsh used a keynote speech of more than 3,500 words at the Jackson Hole meeting to signal his commitment to controlling inflation and then raised rates, Wall Street is preparing for a possible new tightening cycle. Fed officials put their rate projections for the end of this year and next year at 4.1% in the dot plot, but few experts are confident the pause will hold. Korea has little choice but to tighten further in defense of the currency and against capital outflows, yet a steep increase is also difficult given household debt above 2,000 trillion won and mortgage rates that have topped 7%. Bank of Korea Governor Shin Hyun-song said Korea does not necessarily have to follow the U.S. in raising rates, while stressing that the biggest factor moving the exchange rate is the Korea-U.S. rate gap.

2. No MLCC ETFs in Korea, but Four Listed in the U.S. in a Month

- Key points: Four funds have listed in the U.S. market over the past month, starting with Themes ETFs' PSOX and followed by Defiance's CAPA, Roundhill Investments' CCML and Global X's MLCC. The core holdings are Samsung Electro-Mechanics and Murata Manufacturing. Samsung Electro-Mechanics carries its highest weighting in CAPA's underlying index at 21.55%, followed by about 20% in Global X MLCC, the 17% range in CCML and around 9% in PSOX. Behind the trend is rising power consumption by AI servers. Kiwoom Securities estimates that the number of MLCCs used per GPU will rise from about 200 in Nvidia's H100 to roughly 5,000 in the next-generation Rubin. Customer qualification also takes two to three years and mass production on a new line takes 12 to 24 months, putting the supply bottleneck in focus as an investment opportunity.

3. Nuclear Stocks Split: KEPCO E&C Jumps 39% While Korea Electric Power Falls 6%

- Key points: According to the Korea Exchange, KEPCO Engineering & Construction shares surged 38.65% in the month from the 18th of last month through the 18th of this month, while Korea Electric Power fell 5.67%, putting the return gap at more than 44 percentage points. Over the same period, Hyundai Engineering & Construction (000720) rose 13.35% and Daewoo Engineering & Construction (047040) gained 10.13%, while Doosan Enerbility (034020) and KEPCO KPS (051600) advanced 8.99% and 3.56%, respectively. With new U.S. nuclear projects raised in discussions on investment in the U.S., the prospect of participation by Korea's nuclear value chain has emerged as fresh share-price momentum. Meanwhile, Hyundai Motor Securities (001500) cut its forecast for Korea Electric Power's operating profit this year by 8.1%, to 7.006 trillion won from 7.622 trillion won, reflecting higher oil prices.

4. "Fair Value in the Low 1,300s; a Stronger Won Is Favorable for Now"

- Key points: In an urgent survey of 20 foreign exchange experts conducted by Seoul Economic Daily immediately after consecutive rate increases in the U.S. and Japan, the largest group of respondents, seven, picked 1,300 to 1,350 won per dollar as the appropriate level. Adding the four respondents who cited 1,350 to 1,400 won, a total of 11 — more than half — saw fair value in the 1,300-won range. The won-dollar rate stood at 1,383.3 won on the 18th on a daytime trading basis, closing in on the 1,400-won mark. Kang Hyun-joo, senior research fellow at the Korea Capital Market Institute, said that with international oil prices high, an appreciating won eases import price pressure and raises households' real purchasing power. On the October monetary policy board meeting, 15 respondents expected rates to be left unchanged.

5. CXMT Begins First Mass Production on Fifth-Generation DRAM Process: "50% More Chips per Wafer, Improved Power Efficiency"

- Key points: China's ChangXin Memory Technologies declared at the World Manufacturing Convention in Hefei, Anhui province, that it has begun mass production on its G5 platform, a fifth-generation DRAM process. The company said the potential number of dies per wafer, converted to an 8Gb product basis, is at least 50% higher than on the fourth generation, but did not disclose specific yields or monthly output. CXMT ranked fourth in global DRAM revenue share in the second quarter of this year at 9.5%, behind Samsung Electronics, SK hynix and Micron. Citi, however, projects global DRAM demand will rise 30% in 2027 and 35% in 2028, while supply growth will reach only 19% and 22%, respectively.

6. Anthropic's Shifting Valuation Raises Doubts on Further Growth as OpenAI and Chinese Rivals Close In

- Key points: Anthropic, which is preparing an initial public offering this year, saw annualized revenue surge to $65 billion as of July and is expected to top $120 billion by the end of this year. The company ranks first among private AI developers with a valuation of $965 billion, but OpenAI has won corporate customers with aggressive pricing following the release of GPT-5.6 and has overtaken Anthropic in weekly customer spending on OpenRouter for the first time in two and a half years. Low-cost open-source models from China's Moonshot AI and DeepSeek are also fueling price competition. With post-listing valuation estimates ranging widely from $1.5 trillion to $4 trillion, the listing has been pushed back from October to November.