Unavoidable Inflation: Who Will Win in the Second Half of 2026? | Shin Hwan-jong, Adviser at Korea Investment & Securities [Conversation with Shin]

Advisor Shin Hwan-jong explains that U.S. interest rate hikes are a response to persistent inflation and prolonged geopolitical risks, while strong growth and AI investment are cushioning the immediate impact. However, he believes it is difficult to apply investment principles from the past era of low interest rates and neoliberalism unchanged, because war-driven high oil prices, increased supplies of government and corporate bonds, and declining demand for U.S. Treasuries from emerging-market central banks are pushing up long-term interest rates. U.S. hegemony and the dollar's standing may gradually weaken over an extended period, but dollar assets are likely to retain their core position because alternatives are scarce. He proposes a diversification strategy combining dollar-denominated bonds with gold, other currencies, and real assets. He assesses that AI could lower prices over the long term, but could instead fuel inflation over the next several years as investment concentrates on infrastructure, electricity, minerals, and personnel. For South Korea, he says further confirmation is needed to determine whether high growth translates into an improvement in potential growth, and mentions an approach of increasing overseas investment when the won is strong and reducing currency risk when the won weakens sharply. In asset allocation, he suggests gradually using gold, stocks related to real assets, and long-term bonds once interest rates have risen sufficiently, while taking a conservative view of the stock market in quarter 4 because of oil prices, interest rates, and weak supply-and-demand conditions.