▲ AI PRISM* Personalized Economic Briefing
* 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 customized news items for each reader type.
[Key Issue Briefing]
■ Treasury yields surge: With international oil prices continuing to climb on the widening conflict in the Middle East, the yield on the 10-year U.S. Treasury note, the benchmark for global bond markets, broke through the 5% line during trading on the 15th. With market rates far exceeding the 3.50-3.75% policy rate, markets are treating as a foregone conclusion the possibility that the U.S. Federal Reserve and the Bank of Japan will raise rates simultaneously this month for the first time in 20 years. It is the third time since 2007, just before the global financial crisis, that the 10-year U.S. Treasury yield has topped 5% in intraday trading.
■ Rate outlook reverses: With the August consumer price index rising 0.4% from the previous month and inflationary pressure showing little sign of easing, experts who had expected rates to stay on hold are revising their forecasts one after another. It is the exact opposite of last week's survey, in which more than two-thirds of respondents predicted no change. Meanwhile, the view that a 25bp hike may not be the final move but the start of tightening is also gaining ground.
■ Calls to slow AI: As major leaders in the artificial intelligence industry successively argue for slowing the pace of advanced AI development, debate over the reasons behind it is growing. Critics contend that companies preparing for initial public offerings have an interest in reducing financial burdens and blocking late entrants from catching up. Concerns that Chinese companies could narrow the technology gap while U.S. firms slow development are also cited as a factor undermining the practicality of the slowdown argument.
[News of Interest to Global Investors]
1. Pulling Up the Ladder on Late Entrants: The Race to Seize AI Standard-Setting Power
- Key summary: The Wall Street Journal reported on the 14th, local time, that the clash between money and safety facing major AI companies such as Anthropic and OpenAI has pushed the entire industry into crisis. After Anthropic Chief Executive Officer Dario Amodei called for slowing the pace of development, OpenAI CEO Sam Altman and xAI CEO Elon Musk echoed the call, and Microsoft released an AI code of conduct. But David Sacks, chair of the White House science and technology advisory council, noted that asking the government for the regulation you want can look like regulatory capture. Anthropic is pursuing a Nasdaq listing at the end of October this year and is in talks to raise $10 billion in investment, having secured Nvidia as a key investor, while OpenAI has raised its projected spending on AI computing infrastructure through 2030 to $750 billion from $600 billion.
2. U.S. Inflation Upends Rate Outlook: 85% of Experts Say Fed Hikes This Week
- Key summary: In a Reuters survey of 101 economists conducted on the 14th, local time, 86 of them, or 85%, expected the Fed to raise rates by 25bp at its September FOMC meeting. If that happens, the U.S. policy rate will rise to 3.75-4.00% from the current 3.50-3.75%, and it would be the Fed's first rate increase since July 2023. The August CPI's 3.4% rise from a year earlier and 0.4% gain from the previous month, far above July's 0.1% increase, is cited as the reason for the revised forecasts. In addition, 37 of the 70 respondents who offered a view on the future rate path, or about 53%, expect at least one more increase by the end of March next year, reflecting a spreading view that tightening will be prolonged.
3. U.S. 10-Year Breaks the 5% Line as Market Bets on Rate Hike
- Key summary: The yield on the 10-year U.S. Treasury note rose 7bp (one bp equals 0.01 percentage point) during trading on the 15th to 5.039%, its highest level since July 2007. The move followed news that Saudi Arabia had closed an alternative crude shipping route, sending Brent and U.S. West Texas Intermediate crude futures up about 5% to above $100 a barrel and spreading inflation concerns. Price indexes far above the Fed's 2% target, the U.S. federal government's massive debt and worries about large-scale AI-related corporate bond issuance also pushed yields higher. As a result, the probability of a 0.25 percentage point increase at the September Federal Open Market Committee meeting jumped to 94.5% from 87.3% a day earlier, based on the CME FedWatch tool.
[Reference News for Global Investors]
4. Seoul and Washington in Last-Minute Tussle Over Westinghouse Stake, With Board Seats the Key
- Key summary: South Korea and the United States are in last-minute negotiations over the acquisition of a stake in U.S. nuclear power company Westinghouse, tied to a $200 billion investment package in the United States. The United States was initially reported to have asked South Korea to acquire a 20% stake, but talks are said to be proceeding over a lower level of ownership. Washington believes that participation by core companies in the nuclear ecosystem, such as KEPCO, Korea Hydro & Nuclear Power and Doosan Enerbility, as shareholders would strengthen Westinghouse's ability to execute projects. Seoul, meanwhile, has made securing control over the reactor intellectual property held by Westinghouse, which owns the original technology behind domestic light-water reactors including the APR-1400, its top priority. The two countries are reported to be set to sign an investment agreement, including a plan for South Korea to invest in the construction of eight large nuclear reactors in the United States, as early as the 18th.
5. With China's Rare Earth Controls Looming, Korea Searches for Resources in Chungnam and Sejong
- Key summary: With the expiration of China's grace period on additional rare earth export controls approaching on Nov. 10, the Korea Institute of Geoscience and Mineral Resources has designated roughly 225 square kilometers stretching from Jeonui in Sejong to Gongju in Chungcheongnam-do as a new promising area and begun airborne radiometric and magnetic surveys. The institute plans to fly a total of 951 kilometers by the end of October to gather data and then narrow down areas with promising deposits. Last year China expanded its export controls to finished magnets, refining technology and third-country transactions, and introduced extraterritorial controls that require licenses even for foreign products containing 0.1% or more of Chinese rare earths. Still, while South Korea's dependence on China for rare earth raw material imports stood at around 50% in 2025, China's share of imports of materials and components topped 90% for the first time in nine years since 2017, showing a continued concentration in downstream processing.
6. Korea's Capital Market Holds First Integrated IR Event, With Sedaily Invest Forum Joining
- Key summary: According to the Financial Services Commission, Korea Premium Week 2026 will run for three weeks from the 28th of this month through Oct. 16, with 42 organizations from government, related agencies and the private sector and 55 listed companies taking part. Unlike Asian rivals such as Japan and Taiwan, South Korea has been criticized for holding investor relations events sporadically, diluting their impact, and the aim is to create a venue for global discussion by staging 25 events consecutively over three weeks. In the global conference sessions on the 28th and 29th, about 80 officials from overseas pension funds, sovereign wealth funds and more than 10 global long-only and hedge funds will attend closed-door roundtables, while Samsung Electronics (005930), SK hynix (000660) and Hanwha Aerospace (012450) will hold one-on-one meetings. In addition, Seoul Economic Daily's 16th Invest Forum will be held on Oct. 13 as one of the component events, under the theme "AI Tectonic Shift: The Next Paradigm of Infrastructure Investment."
▶Read the article: U.S. 10-Year Breaks the 5% Line as Market Bets on Rate Hike
▶Read the article: Seoul and Washington in Last-Minute Tussle Over Westinghouse Stake, With Board Seats the Key
