time now for an in-depth look at the market news this afternoon and for that i'm joined on
the line by professor yang junsuk of the catholic university of korea professor yang good afternoon
thanks so much for coming on today happy to be here well stocks on wall street ended a rough
week on friday with somewhat of a rebound for tech shares the nasdaq about 1.4 percent higher the dow
and the s p closed lower the futures are higher right now though what's the story in the global
markets okay well markets have been in turmoil since that giant step that it took on wednesday
raising the rates by 0.75 percent and while the markets rose slightly on the day of the giant
step it drastically tanked on thursday much like what happened when the fed raised the rate by 0.5
percentage point on uh in may now uh the fed also released their so-called dot charts which showed
how a fed fomc members expect uh interest rate to be at the year end and there was a drastic rise
compared to the last stock chart that they released in february uh so in the
latest thought chart the fomc members expect the year-end interest rate to be around 3.5
and next year year-end interest rate to be around 3.5 to 4 so this is a significant rise
over the last chart uh which showed that the fomc members expected the rates to be around 2.0
at this year's end at 3.0 percent at next year's end so the rates will go up much faster and higher
than what the fomc members originally expected now the economists uh believe that the so-called
mutual rate of interest is the interest rate under normal circumstances is about 2.0 to 2.5 percent
and the uh if the dot rate does come true then the year end interest rate is going to be much higher
than this mutual rate uh so more and more analysts are predicting uh recession or a negative growth
and the uh stagnation somewhere between the fourth quarter of this year and the first quarter of next
year uh and uh the uh uh the fed uh releases also show that the uh growth rates for 22 22 and 2023
have been revised downward by the fomc members as well from 2.8 to 1.7 percent this year
and 2.2 to 1.7 next year this is not quite a recession the rule of thumb for the united states
is that you need two straight quarters of negative growth to become to have a recession so they are
not expecting a recession but they are expecting softer growth and the biden administration and the
fed officials are now going around arguing that while uh it's becoming more and more difficult
recession can be avoided so there's that conflict between the private sector analysts and the uh
government officials and he uh note that though the most the first quarter uh statistics
show that u.s job market and demand is strong the may job creation was 328 thousand jobs
wage growth was 0.3 in may uh 5 5.2 over 12 months in may uh and the latest personal
consumption expenditure uh figures which is only available up to april for now shows that the
consumption expenditure rose by 1.4 in april so in some sense uh yes analysts are expecting recession
in the near future uh but uh right now the numbers do not seem to be backing them up so it seems at
least for now more of a fear than actual uh signs that we see in the economy uh for the week dow
fell by 5.8 percent snp fell by 4.8 percent and nasdaq fell by 4.8 for the year dow is now down 18
s p down by 23 and nash back down by 32 percent european stock market they also
had a volatile week bank of england uh raised its uh rate for the fifth straight rate hike
in a row swiss national bank had its first rate rise since uh 2007 european central bank after
getting a report saying that the inflation in may hit 8.1 percent over the last 12 months
they had announced that they will stop net bond purchasing in june and raise rates in july and
several 0.5 percentage points uh rye seemed to be on the table right now
they also had an emergency meeting on wednesday the european central bank to create new tools to
tackle the risk of what's called europe eurozone back fragmentation uh which is an unjustified
jump in the bond yields of a weaker eurozone government they're afraid that some of the
weaker european countries will experience a debt crisis like greece did during the global
financial crisis so they are trying to head off such crisis before it happens uh on friday
european markets were mixed as well footstep was down tax was up cac was about level asia china
consumer price index inflation came in at 2.1 over 12 months that's actually below expectations
producers price index is on a downward trend as well and china uh held its uh benchmark
benchmark lending rates uh it left it unchanged japan's latest inflation number for april
uh was 2.5 percent rising from 1.4 percent in march but both japan and china has announced that
they will continue expansionary uh monetary and fiscal policy so there will be two islands in the
uh world where you have uh expansionary policies rather than contractionary policies today uh
the uh nikkei was down 0.7 percent shanghai is down 0.04 percent hangs bang is up 0.2 percent
right it is an interesting contrast uh here in asia with those two islands as you put it uh
well in korea stocks were down today closing below 2400 points uh that's uh the lowest it's
been in over a year and a half well professor uh we're just gonna have to wrap it up there today uh
thank you so much as always for sharing your insights with us we really appreciate it thank you