FED CUTS 0.25%: THE MANUFACTURED STABILITY NARRATIVE IN KOREA VS. THE POLITICAL REALITY IN THE UNITED STATES
A Structural Comparison of U.S. Political Reality, Korean Economic Fragility, and Narrative Manipulation
EXECUTIVE SUMMARY
The Federal Reserve’s 0.25% rate cut should have been a trivial monetary adjustment.
It does not meaningfully stimulate the U.S. economy, nor does it alter global capital flows.
Yet in South Korea, major outlets reframed the cut as if it were a turning point for domestic stability—suggesting capital inflows, reduced risk, and macroeconomic relief.
This is a constructed narrative, not an economic reality.
International media (Reuters, FT, Bloomberg) describe the event as:
a fractured FOMC,
a politicized decision shaped by Trump’s pressure,
an institution losing coherence.
South Korean media, by contrast:
exaggerated the Fed’s rationale,
framed the cut as beneficial for Korea,
misreported dissenting votes,
and omitted the political crisis surrounding the Fed.
All while the Korean economy faces:
declining non-semiconductor exports,
record household debt,
forced capital relocation to the U.S.,
and a bilateral agreement still unresolved.
The narrative is not economic analysis.
It is political anesthesia ahead of Korea’s 2026–2028 electoral cycle.
PART I — FACTUAL VERIFICATION
Manipulation Detected: What Is True and What Is Not
1. Correct elements (verified internationally)
✔ The Fed cut 25bps, setting the target range at 3.50–3.75%
— Confirmed by Reuters and FT.
(Sources: Reuters, Dec 10 2025; FT, Dec 10 2025)
✔ This was the third consecutive cut since September.
(Reuters)
✔ The dot plot shows only one cut projected for 2026.
(Bloomberg, Reuters)
✔ Significant internal division among FOMC members.
(Reuters: “deeply divided Fed”)
These points are factual and aligned with international coverage.
2. Manipulated or distorted elements
A. Exaggerating the “labor downside risk” as the Fed’s official rationale
South Korean reports claimed the Fed recognized
“고용 하방 리스크 증가” (“increasing downside risk in employment”).
This phrase does not appear in the official FOMC statement.
(Federal Reserve Board Press Release, Dec 10 2025)
➡ Narrative manipulation:
Transforms a politically influenced decision into a purely technical one.
B. Artificial emphasis on the Korea–U.S. rate gap
International outlets do not mention Korea in their FOMC coverage.
(Reuters, FT, Bloomberg — no Korea reference)
Korean media reframed the event to imply macro-benefits for Korea.
➡ Domestic framing to soothe public concern.
C. Reporting dissenters’ names without verification
Reuters confirms dissent but does not publish names of dissenting members.
(Reuters, Dec 10 2025)
Korean media presented specific individuals and their positions as fact.
➡ Unverified information → constructed narrative.
D. Minimizing the political fracture inside the U.S. system
International media highlight:
Trump’s pressure on the Fed
(Reuters: “political pressure looms”)Loss of institutional independence
(FT: “fractious meeting”)Unusual, destabilizing internal division
Korean outlets omit or downplay these dynamics.
➡ Deliberate attenuation of U.S. political risk to support a domestic narrative.
FIVE LAWS ANALYSIS
1. TRUTH — LOW
Misquotes, omissions, and interpretive statements presented as facts.
2. REFERENCE — LOW
Core claims do not match the Fed’s official statement nor Reuters/FT reporting.
3. ACCURACY — LOW
Misattributed motives, unverified dissent details, selective context.
4. JUDGMENT — MODERATE-LOW
Judgment is biased toward creating a sense of domestic stability.
5. INFERENCE — LOW
Faulty inferences:
that 25bps changes capital flows,
that Korea benefits structurally,
that risk declines due to the cut.
PART II — POLITICAL CONTEXT: 2026–2028
🇺🇸 United States — 2026 Elections
November 3, 2026 midterms.
Entire House (435 seats) up for election.
(Source: USAGov; Wikipedia: 2026 U.S. House Elections)35 Senate seats (33 regular + 2 special).
(Wikipedia: 2026 U.S. Senate Elections)Broad state elections: governors, legislatures.
(Ballotpedia, LSE Blogs)
This cycle determines Congressional control and amplifies political pressure on the Fed.
🇰🇷 South Korea — 2026 & 2028 Elections
Korea’s National Assembly is renewed 100% every 4 years.
(Source: KBS World News)Next full parliamentary election: 2028.
2026 includes local/regional elections, not national ones.
This architecture creates strong incentives to manufacture stability in 2026–2027 ahead of total parliamentary replacement in 2028.
PART III — ECONOMIC IMPACT OF THE 25bps CUT
🇺🇸 A. Impact on the U.S. economy
Real impact → near zero
No meaningful effect on consumption, investment, or labor markets.
Financial impact → modest
Slight movement in short-term yields.
Limited effect on equities.
Political impact → high
Exposes FOMC fragmentation and politicization.
🇰🇷 B. Impact on the Korean economy
Real impact → zero
Exports, employment, domestic consumption remain unchanged.
Financial impact → limited
Won may appreciate slightly.
Outflow pressure eases marginally, but trend persists.
Political impact → high
The cut is weaponized as a stability narrative.
PART IV — STRUCTURAL REALITY OF THE KOREAN ECONOMY
The Fed’s 25bps cut does not alter any of Korea’s structural problems:
declining non-semiconductor exports,
record household debt (world’s highest),
industrial relocation to the U.S. under the 2025 pact,
agreement still unresolved,
weakening domestic demand,
dependence on energy imports,
quiet deterioration of manufacturing sectors.
Media silence on these points is deliberate:
economic deterioration continues beneath the manufactured narrative.
BBIU FINAL CONCLUSION
The Fed’s 0.25% rate cut is economically meaningless but politically explosive.
In the U.S., it exposes institutional fracture and political interference.
In Korea, it becomes a cinematic illusion — a crafted story of stability, capital inflows, and macro relief.
But reality remains unchanged: 25bps does not move capital, does not fix Korea’s structural weaknesses, and does not alter the trajectory of deterioration as long as the U.S.–Korea industrial pact remains unresolved.
The narrative changes.
The fundamentals do not.
Annex 1 – Structural Snapshot of the Korean Economy and Sovereign External Obligations (2025–2027)
1. Macro snapshot 2025–2026
2025 is a near-stall year: most official institutions place growth around 0.8–1.0%, with a rebound to ~1.8% in 2026 driven mainly by base effects and gradual recovery of domestic demand.Ministry of Economy and Finance+2KDI+2
The government has shifted to expansionary fiscal policy: 2025 and 2026 budgets include multiple extra packages, pushing the fiscal deficit toward ~4% of GDP and putting general government debt on a steeper upward path (low-40s% pre-COVID → >50% mid-2020s, projected ~58–60% by 2029).MK +3IMF+3Reuters+3
Domestic demand is weak: construction, some services, and SME sectors remain under pressure; policymakers explicitly rely on AI/industrial policy + fiscal stimulus to compensate for tariff shocks and demographic drag.SECO+2Korea Herald+2
2. External sector: semiconductor illusion and trade re-wiring
Export headline numbers look “OK” because of record semiconductor and ship exports, with annual exports on track to exceed USD 700bn for the first time, driven by AI-linked chips and high-value shipbuilding.Korea Joongang Daily+1
Once you strip out semiconductors, the picture is weak: autos (hit by U.S. tariffs and localised production), steel, petrochemicals and some machinery segments show sustained declines or stagnation—described locally as the “semiconductor illusion.”ING Think+3Korea Joongang Daily+3조선일보+3
The new U.S.–Korea trade deal locks in a 15% tariff on many Korean exports plus a USD 350bn investment commitment into the U.S., including a large shipbuilding fund and energy purchases. This converts part of Korea’s future export earnings into pre-committed outflows.Financial Times+1
3. Debt structure and sovereign profile
General government debt (central + local) is now around the low-50s % of GDP and projected to reach high-50s by the late 2020s under current policies. Ratings agencies and the IMF still classify it as “sustainable with fiscal space,” but emphasise the speed of the increase.IMF+2Fitch Ratings+2
Total external debt reached about USD 738bn in Q3 2025. Short-term external debt (residual maturity <1 year) is ~USD 162bn, about 22% of total external debt and roughly 38% of FX reserves.Trading Economics+2Xinhua News+2
The increase in external debt in 2025 has been driven mainly by government issuance and non-bank sectors, while banks and the central bank have slightly reduced their foreign liabilities, indicating a deliberate shift of external funding to the sovereign and corporates.MK +1
4. FX reserves and external liquidity
FX reserves (ex-gold) are in the USD 415–430bn range and have been rising modestly in 2025; the latest public data place them around USD 428–431bn, near a three-year high.Trading Economics+2조선일보+2
According to the IMF Article IV, reserves cover more than 200% of short-term external debt (residual maturity), and external debt is around 40% of GDP, which puts Korea in the “comfortable liquidity” bucket by standard metrics.IMF+1
However, the FX management strategy is changing: the government has raised its 2026 FX bond issuance cap to USD 5bn (from 3.5bn) explicitly to prepare for the USD 350bn U.S. investment pledge and to shore up the won against tariff and outflow pressure.Financial Times
5. Sovereign debt to multilaterals: stock and upcoming payments
World Bank: Korea’s relationship has flipped. The last IBRD/IDA project was approved in 1998 and fully repaid by 2002. Since then Korea has been a net contributor and host of World Bank facilities (e.g. the new digital/AI knowledge centre). There is no material outstanding IBRD/IDA loan stock to amortise.Wikipedia+1
Asian Development Bank (ADB): crisis-era sovereign borrowing in the late 1990s was repaid ahead of schedule. Korea is now a founding member and capital provider, not a major sovereign debtor. Public ADB fact sheets emphasise capital subscription, not ongoing loan exposure.K-Developedia+1
IMF: Korea currently has no IMF programme and no use of IMF credit; instead, it holds an IMF reserve position (~USD 4.4bn), which is an asset within its reserves, confirming creditor status rather than borrower.WAM+1
Implication:
The sovereign’s direct multilateral debt-service schedule in 2025–2027 is negligible. Upcoming payments to IMF/WB/ADB are routine (charges, subscriptions) and do not constitute a meaningful drain on FX reserves. The real external servicing pressure lies in:
roll-over of short-term external debt (banks + corporates),
redemption of long-term foreign-currency bonds, and
the contractual outflows embedded in the USD 350bn U.S. investment and energy-purchase commitments.
6. Impact on Bank of Korea reserves (2025–2027)
From a textbook macro view:
With reserves > USD 420bn, short-term external debt ~USD 160bn, and a current-account surplus, Korea looks comfortably liquid. Standard ratios (reserves / short-term debt > 2x) are solid, and the IMF explicitly describes external buffers as adequate.IMF+1
From a BBIU structural view:
Multilateral payments are not the story.
There is no heavy amortisation schedule to IMF, IBRD, or ADB. These institutions no longer function as hard creditors to the Korean sovereign, but as partners where Korea is often a funder. The “sovereign debt to multilaterals” channel does not threaten reserves in 2025–2027.
The real reserve drain is quasi-contractual, not multilateral.
The USD 350bn U.S. deal and associated caps on dollar outflows (USD 20bn/year) effectively pre-assign a portion of future FX earnings to U.S. investment and energy purchases, turning what used to be discretionary reserve policy into a rules-based external transfer.Financial Times+1
To make this politically and market-wise survivable, the government is already front-loading external funding (higher FX bond issuance, expansionary budgets) and using the BOK balance sheet as a buffer to absorb volatility in the won.
Growing domestic fragility meets pre-committed external flows.
While the IMF and ADB project a rebound in 2026, this is layered on top of:
structurally weak exports outside chips and ships,
rapidly rising public debt, and
high private-sector leverage (households + corporates).OECD+3Kiet+3Korea Joongang Daily+3
In that environment, reserves function less as a classic “war chest” and more as collateral for geopolitical and trade obligations.
BBIU conclusion for Annex 1
Upcoming sovereign payments to multilaterals are economically irrelevant for Korea’s reserve trajectory in 2025–2027.
The Bank of Korea’s reserves are quantitatively strong but qualitatively pre-encumbered by:
rising external debt,
tariff-distorted export composition, and
the long-term extraction mechanism embedded in the U.S. trade/investment deal.
Any serious stress episode is therefore more likely to be triggered by a sudden stop in private external funding or an acceleration of U.S.-linked outflows, not by IMF/World Bank/ADB debt service.
ANNEX 2 — KOREA 2030 STRUCTURAL OUTLOOK
A Five-Year Projection of Liquidity, Industrial Capacity, and Sovereign Stability (2025–2030)
BBIU Premium Edition — Full-Length Analysis
0. Purpose and Scope of Annex 2
This annex provides a full-spectrum structural projection of the South Korean economy through 2030. It integrates:
BBIU’s July–December structural analyses,
the Forced Dollar Liquidation framework,
the Terminal Liquidity Signal,
the Forecast Fulfilled model,
the Semiconductor Illusion thesis,
the restructuring embedded in U.S.–Korea industrial realignment,
the political architecture of 2026–2028,
and the divergence between gross reserves and usable reserves at the Bank of Korea.
The objective is not to produce cosmetic forecasts, but to outline structural trajectories, points of rupture, and systemic constraints shaping Korea’s economic identity through 2030.
1. The 2024–2025 Breakpoint: How Korea Entered the Terminal Liquidity Arc
1.1 Forced Dollar Liquidation as Policy Signaling
Beginning in late 2024 and accelerating through 2025, the Korean state increasingly relied on compulsory or semi-compulsory USD sales from:
the National Pension Service (NPS),
major chaebol,
insurance companies,
bank treasury desks.
This phenomenon—captured in BBIU’s article “When the State Sells the Private”—is not a liquidity tool; it is a structural signal:
The State is defending the currency without using the State’s own reserves.
For any advanced economy, this indicates:
insufficient confidence in the quality of FX reserves,
desire to preserve the illusion of strength,
fear that transparent intervention would trigger speculative repricing,
and increasing political sensitivity around reserve levels.
In the BBIU framework, forced liquidation marks Phase 1 of the Terminal Liquidity Curve:
liquidity constraints are denied externally but revealed internally.
1.2 The Illusion of Strong Reserves (Gross vs. Usable Reserves Gap)
Korea’s official reserves (~USD 420–430B) appear high, but their effective usability is compromised by:
IMF reserve positions (non-spendable),
swap lines counted as reserves,
long-duration U.S. Treasuries with unrealized losses,
foreign-currency assets pledged as banking-system collateral,
pre-committed dollar obligations under the U.S.–Korea industrial pact (USD 350B+),
and the need to maintain a perception buffer before the 2028 full parliamentary election.
Thus the central insight:
The BOK cannot intervene aggressively because the reserves are not functionally available at the scale their nominal level suggests.
This explains why the State drains private-sector USD instead of selling its own.
1.3 Forecast Fulfilled — The Real Liquidity Collapse Was Structural
In “The Forecast Fulfilled: How BBIU Anticipated Korea’s Liquidity Collapse Before the Market Did”, the following chain was identified and validated by the market:
Exports outside semiconductors weaken →
manufacturing fragility increases.The won depreciates →
authorities fear using reserves.State forces private actors to liquidate USD →
disguised intervention.Private USD buffers shrink →
the system becomes more fragile.Terminal Liquidity Phase begins →
the State becomes dependent on maintaining the illusion.
This is the foundation for projecting Korea through 2030.
2. Structural Economic Base (2025–2030)
2.1 Export Composition — The Semiconductor Monoculture
Korean headline exports remain strong only because semiconductors—especially AI-related chips—are booming.
Outside chips:
autos face U.S. tariff pressure and offshore production shifts,
petrochemicals remain subdued,
steel is structurally weak,
shipbuilding is partially relocating to U.S. yards under the bilateral pact,
machinery exports stagnate.
This creates the Semiconductor Illusion:
Korea’s export success masks a hollowing-out of its industrial base.
By 2030, unless diversification re-emerges, Korea becomes structurally dependent on the chip cycle—an unsafe macro foundation.
2.2 Domestic Demand — Debt, Demographics, and Construction Decline
Korean households hold one of the world’s highest debt-to-income ratios.
This constrains:
consumption growth,
mortgage refinancing capacity,
discretionary spending,
and the ability to withstand rate or tax shocks.
Additionally, the construction sector, once a pillar of domestic momentum, is contracting due to:
interest-rate pressure,
oversupply,
stalled redevelopment projects,
zombie developers reliant on rollovers.
By 2030, the demographic curve—shrinking population, aging workforce, falling household formation—converges with these financial constraints, limiting any robust domestic recovery.
2.3 Industrial Relocation — Capital Outflows as Structural Commitment
The U.S.–Korea industrial pact (USD 350B+, multi-year) essentially transforms Korea into a capital exporter:
shipyards: USD 150B+ directed to U.S. shipbuilding capacity,
energy: long-term contracts for U.S. LNG/Oil,
biopharma and EV/batteries: expanded manufacturing footprint on U.S. soil,
defense: procurements and industrial co-location.
This is not optional outflow—this is contractual extraction.
By 2030, the Korean industrial map is materially altered:
more Korean firms producing in the U.S.,
fewer high-value manufacturing clusters remaining in Korea,
shrinking spillover effects for domestic employment.
2.4 Fiscal Structure — Rising Debt, Limited Space
Korea’s fiscal deficit has grown since 2023 due to:
subsidies,
election-cycle spending,
industrial offset packages,
low-growth revenue conditions.
Debt rises from low-40s% of GDP (2019) toward ~60% by 2030.
Korea is not at risk of sovereign default, but:
fiscal flexibility narrows,
stimulus capacity weakens,
future tax burdens intensify.
This interacts with liquidity pressures in ways that become visible in the next sections.
3. Sovereign Exposure and External Constraints
3.1 Multilateral Debt — A Non-Issue
Korea owes no meaningful debt to IMF, World Bank, or ADB.
These institutions present no repayment cliff or liquidity risk.
Thus:
The sovereign does not face multilateral pressure—its vulnerability is elsewhere.
3.2 The Real External Burden: Short-Term Debt + U.S. Pact Outflows
Korea’s true external exposure comes from:
Short-term external debt (~USD 160B)
Requires constant rollover; sensitive to global liquidity conditions.Long-term FX bonds
Redemptions cluster between 2026–2029.U.S. industrial pact outflows (USD 350B)
Long-term structural drains on FX liquidity.
This is why Korea must preserve the appearance of strong reserves—not because of multilateral creditors, but because:
private creditors,
market participants,
and U.S. counterparts
must believe in a stable liquidity profile.
3.3 Why Reserves Function as Collateral, Not Ammunition
By 2025, BOK reserves serve primarily as:
an anchor for external confidence,
a backstop for the banking sector,
an implicit guarantee for rollovers,
a buffer against political risk.
Thus they are not available for open intervention.
Using them aggressively would:
reveal the Gross–Usable gap,
raise CDS spreads,
trigger speculative attacks,
complicate the 2026–2028 political cycle,
undermine Korea’s negotiation position with the U.S.
Hence the reliance on private-sector USD, not BOK reserves.
4. Political Architecture 2026–2028: The Narrative Imperative
4.1 U.S. Midterms 2026 — The External Constraint
Control of the U.S. Congress determines:
industrial policy direction,
tariff regimes,
Korean investment obligations,
defense co-location commitments.
A divided Fed and a politicized U.S. monetary apparatus increase uncertainty for Korea’s industrial trajectory.
4.2 Korea 2026 (Local) and 2028 (Parliamentary Overhaul)
Korea renews 100% of its National Assembly in 2028.
This fact fundamentally shapes economic policy:
No government will allow reserves to fall visibly before 2028.
No acknowledgement of structural decline will be permitted.
Media framing must maintain the perception of stability.
Liquidity issues must be contained or concealed.
Dollar sales must be offloaded to private actors, not the BOK.
Narrative becomes a tool of macroeconomic management.
5. The Terminal Liquidity Framework (2025–2030)
BBIU Four-Phase Model
Phase 1 — Concealed Stress (2024–2025)
Dollar shortages denied publicly.
Private-sector USD drained silently.
Illusion of reserve strength maintained.
Semiconductor boom masks underlying weakness.
Phase 2 — Private Buffer Exhaustion (2026–2027)
NPS and chaebol exhaust discretionary USD holdings.
Banks tighten FX liquidity conditions.
Rollovers become more expensive.
Won stability becomes costlier to maintain.
Phase 3 — Political Inflexion (2028)
Full parliamentary election.
Mass fiscal promises.
Media optimization of narratives.
Reserve management becomes ultra-conservative.
Potential for policy missteps increases.
Phase 4 — Systemic Repricing or Restructuring (2029–2030)
One of two outcomes emerges:
Controlled restructuring
renegotiated commitments to the U.S.,
industrial policy pivot,
managed depreciation of the won.
Discontinuous break
sudden loss of narrative control,
rapid FX volatility,
forced BOK intervention revealing reserve weakness.
6. Scenarios for 2030
Scenario A — Managed Stagnation (Base Case, 55%)
Slow growth (~1.5–2%).
Semiconductor-led exports; rest weak.
Won stable but soft.
Private-sector USD chronically scarce.
Outflows to U.S. continue.
No crisis, but no dynamism.
Scenario B — Discontinuous Break (30%)
Trigger:
global liquidity shock,
failed rollover,
U.S.–Korea renegotiation clash,
domestic political instability.
Won reprices sharply.
BOK intervenes → reserves decline → illusion breaks.
Economic contraction follows.
Scenario C — External Restructuring (15%)
Korea renegotiates industrial commitments.
Expands energy diversification.
Reduces capital outflows.
Supports domestic reindustrialization.
Requires political consolidation + U.S. acceptance.
Methodological Note – ODP/FDP as the Structural Lens
This report is not built on conventional macro forecasting.
It is built on ODP/FDP – a structural lens BBIU uses to separate what a system says about itself from what its forces are actually doing.
1. ODP — Orthogonal Differentiation Protocol
ODP asks a simple question:
Are we mixing variables that should be separated?
Throughout this report, five orthogonal axes are kept deliberately distinct:
U.S. Political Reality vs. Korean Economic Structure
In the United States, the core variable is political capture of the Fed: Trump’s pressure, the fractured FOMC, and the 2026 midterms.
In Korea, the core variable is economic fragility: non-semiconductor export decline, household leverage, industrial relocation, and FX dependence.
By separating these, we avoid the illusion that both countries are “experiencing the same macro shock.”
Narrative vs. Structure
Narrative: how Korean media reframes a trivial 25bps cut into “proof of stability.”
Structure: unchanged capital flows, unchanged real economy, worsening external extraction.
This orthogonal split is what allows the report to label the Fed-cut coverage frankly as political anesthesia, not economic analysis.
Gross Reserves vs. Usable Liquidity
Gross reserves: the official ~USD 420–430B, sufficient by textbook metrics.
Usable reserves: what remains after IMF positions, swaps, collateral, unrealized losses, and pre-committed U.S. obligations are stripped out.
ODP makes explicit that “high reserves” and “high intervention capacity” are not the same variable.
Domestic Liquidity vs. External Commitments
Domestic USD: held by NPS, chaebol, insurers, banks – now being forced into the market.
External commitments: short-term debt rollovers + USD 350B pact with the U.S. + energy and industrial flows.
This orthogonal axis reveals forced dollar liquidation not as a local anecdote, but as a structural adjustment mechanism.
Electoral Horizon vs. Economic Horizon
Electoral: U.S. midterms 2026, Korea’s full parliamentary renewal in 2028.
Economic: the 2024–2030 terminal liquidity arc described in Annex 2.
Keeping these separate makes it clear that policy is not optimizing growth—it is optimizing survival until key dates.
Without ODP, all of these would blur into “macro noise.”
With ODP, they become a set of clean, independent axes on which Korea’s trajectory can be mapped.
2. FDP — Force Direction Protocol
Once the axes are separated, FDP asks:
In each axis, which direction are the forces actually pushing?
In this report:
On the U.S. axis, the force runs from central bank independence → toward political control of the Fed.
On the Korean economic axis, the force runs from diversified industrial base → toward semiconductor monoculture and capital export.
On the narrative vs. structure axis, the force runs from alignment → toward maximal divergence: the story becomes more positive as the structure deteriorates.
On the reserves axis, the force runs from “reserves as ammunition” → to “reserves as stage prop and collateral.”
On the liquidity axis, domestic USD buffers shrink while external obligations grow – a scissors movement characteristic of terminal liquidity.
On the time axis, politics pushes to delay recognition (2026–2028), while the economy pushes toward repricing (2029–2030).
The three scenarios for 2030 are simply the FDP outputs of these forces:
Managed Stagnation – all forces continue in the same direction, but without a visible break.
Discontinuous Break – the gap between narrative and structure becomes untenable; the system is repriced abruptly.
External Restructuring – the force directions are partially reversed through renegotiation and policy realignment.
3. Why This Matters
ODP/FDP is not decoration.
It is the reason this report can say, without hedging, that:
a 0.25% Fed cut is economically trivial,
its political meaning in the U.S. is non-trivial,
its use in Korea is purely narrative,
and Korea’s real constraint is not the headline reserve level, but the direction of liquidity forces under a pre-committed extraction pact.
In BBIU terms:
The coherence of this report does not come from forecasting a number.
It comes from aligning the axes (ODP) and taking seriously the direction of the forces (FDP).
