KOFIA Holds Bond Forum... "Focus Needed on Interest Rate Cuts in First Half of Next Year"

The Korea Financial Investment Association announced on the 26th that it held a bond forum to explore the outlook and investment strategies for the bond and credit markets next year.

Analyst Ahn Jae-kyun of Shinhan Investment Corp., who presented the "2025 Bond Market Outlook and Investment Strategies," explained, "Considering the changes in trade policies and the resulting increase in inflation uncertainty from the second half of Trump's administration, both the Korean and U.S. central banks need to focus on cutting benchmark interest rates in the first half of next year when inflation stabilizes." He added, "Both Korea and the U.S. are expected to lower benchmark interest rates in the first half of next year and keep them steady in the second half."

Analyst Ahn analyzed, "There are many negative factors for the Korean bond market next year, such as an increase in government bond issuance and Trump's re-election," but also noted, "Concerns about rising interest rates are not high." Furthermore, he said, "The current government bond yields are at an attractive level for investment, considering future growth slowdown and inflation stabilization trends," and "Government bond yields are expected to decline toward the end of next year."

Analyst Lee Kyung-rok of Shin Young Securities, who presented the "2025 Credit Market Outlook and Investment Strategies," stated, "With the benchmark interest rate cuts starting in October this year, buying sentiment for credit bonds is reviving, and credit spreads will gradually narrow," adding, "Considering the supply burden, sectors other than public and corporate bonds are expected to show relative strength."

He also said, "Regarding the real estate PF issues currently causing market concerns, it is judged that a soft landing is possible through government measures."