Following the US Federal Reserve's significant 0.5 percentage point rate cut, there is speculation that South Korea may also reduce its rates, all while keeping a close eye on its red-hot real estate market and surging household debt. The Fed's decision to lower its benchmark rate, the first time in over four years since the COVID-19 pandemic hit in 2020 and the first half-point cut since the 2008 financial crisis, has raised expectations for further cuts by year-end. The Korean market experienced heightened volatility in response to the Fed's move, with the Kospi index showing fluctuations throughout the day as foreign investors sold off a substantial amount. The Korean won also depreciated against the dollar, signaling the market's reaction to the Fed's decision. While calls for rate cuts from the government and ruling party in Korea persist due to weak domestic demand and stable inflation, concerns over escalating household debt due to a booming property market are restraining authorities from hastily lowering rates. Market analysts suggest that while a rate cut by the Bank of Korea in October is increasingly likely following the Fed's lead, uncertainties remain about the timing and extent of the cuts, as well as the impact on household debt levels.