New York Financial Experts See Continued Rate Cuts and Widening Yield Spread in U.S. Treasury Market

KIC Holds the 25th New York Financial Forum

Korea Investment Corporation (KIC), the sovereign wealth fund, invited domestic and international financial experts to New York, United States, to discuss the outlook for the U.S. Treasury market next year. The U.S. federal funds rate is expected to continue to decline, while the spread between short- and long-term interest rates is projected to widen.

KIC announced on the 19th that its New York office hosted the 25th 'New York Financial Forum' at the Korea Society in New York on the 18th (local time).

More than 30 people attended the forum, including the Deputy Consul General of the Consulate General of the Republic of Korea in New York, as well as representatives from government agencies, public investment institutions, and investment managers from securities firms, banks, and insurance companies.

Ian Lyngen, Head of U.S. Rate Strategy at BMO Capital Markets, who delivered the keynote presentation, forecasted that continued instability in the U.S. job market next year could lead to lower interest rates. He noted, "The U.S. unemployment rate recently reached its highest level since 2021, and layoff indicators have risen to levels seen during past recessions," adding, "The Federal Reserve is expected to continue cutting rates next year, citing the slowdown in the labor market as justification."

He further predicted, "While U.S. Treasury yields are likely to fall across most maturities by the end of next year, the term premium will widen, causing the yield curve to steepen gradually." This means that the decline in long-term Treasury yields will be less pronounced than in short-term yields, potentially widening the spread between long- and short-term rates.

BMO Capital Markets, a subsidiary of the Canadian financial institution Bank of Montreal, provides comprehensive financial services including investment banking, capital raising, advisory, and risk management.

Lee Kyungtaek, Head of KIC’s New York office and host of the event, said, "With a leadership transition at the Federal Reserve on the horizon, this forum provided a valuable opportunity to forecast the U.S. Treasury market for next year and to discuss key issues in the financial industry in depth." He added, "KIC will continue to create various opportunities to support Korean institutional investors in establishing long-term investment strategies and understanding macroeconomic trends in the United States."

Attendees of the 25th New York Financial Forum held by Korea Investment Corporation's New York office on the 18th (local time) at the Korea Society in New York are conducting a panel discussion. Korea Investment Corporation