Daily Woody Weekly | Sep 20, 2026 — AI Pause Call Outweighs the Fed
The first signal arrived on Saturday, Sept. 12, when Anthropic CEO Dario Amodei published an essay urging frontier AI labs to slow the rate at which they improve their models so that safety work can keep up. “We must slow the pace at which we improve the capabilities of AI models,” he wrote. OpenAI CEO Sam Altman and Elon Musk publicly agreed.
Seoul read the essay as a question about future demand for memory chips. On Monday the KOSPI fell 3.26% to 6,684.37. SK hynix dropped 6.4% and Samsung Electronics 4.1%, while Japan’s Kioxia also lost 6.4%. Foreign and institutional investors together sold a net of more than 4 trillion won (about $2.9 billion) of Korean stocks that day.
Tuesday added a second weight as the 10-year US Treasury yield touched 5%. The KOSPI slipped another 0.85%, its fourth straight loss, then rose 1.37% on Wednesday on thin turnover of about 15.9 trillion won ($11.5 billion).
The Federal Reserve’s decision reached Seoul on Thursday morning. The Fed raised its target range by a quarter point to 3.75–4.00%, its first increase since July 2023, in a unanimous 12–0 vote. Sixteen of 18 officials projected at least one more hike this year, and the median year-end projection rose from 3.8% to 4.1%.
The KOSPI closed that day down 0.04%. Daishin Securities analyst Lee Kyoung-min said the impact was limited because the move had been widely expected. On Friday, after Wall Street rallied on lower oil prices and easing bond-market pressure, the index gained 2.66% to 6,894.23 as foreign investors turned net buyers for the first time in eight sessions.
Not everyone read the essay as a brake on spending. Amodei’s proposal calls for slowing capability gains without stopping development, and Korean analysts noted that no concrete cuts to AI investment had been confirmed. President Donald Trump said American labs should keep going, arguing that a slowdown would give Chinese companies an edge.
| Market snapshot | Close | Change |
|---|---|---|
| KOSPI, Fri Sept. 11 | 6,909.91 | — |
| Mon Sept. 14 | 6,684.37 | −3.26% |
| Tue Sept. 15 | 6,627.26 | −0.85% |
| Wed Sept. 16 | 6,717.97 | +1.37% |
| Thu Sept. 17 | 6,715.41 | −0.04% |
| Fri Sept. 18 | 6,894.23 | +2.66% |
| KOSPI, week | −15.68 pts | −0.23% |
| Won per dollar (3:30 p.m.) | 1,383.3 | +37.4 won |
| US federal funds target | 3.75–4.00% | +0.25 pt |
| Bank of Japan policy rate | 1.25% | +0.25 pt |
The won lost ground every trading day of the week. It closed at 1,345.9 per dollar on Friday, Sept. 11, and at 1,383.3 a week later, a drop of 37.4 won. Higher oil prices and rising Treasury yields supported the dollar early in the week.
The largest move followed the Fed. The won fell 13.6 won on Thursday to 1,382.2, its first close beyond 1,380 in about three weeks. The same day, Korea’s three-year government bond yield rose above 4% and yields on AA-minus corporate bonds reached 4.716%, the highest since November 2023, according to Seoul Economic Daily.
On Friday the Bank of Japan raised its policy rate from 1.0% to 1.25%, the highest level since 1995. Two of nine board members dissented, and the yen weakened after the decision. The won’s seven-session slide is its longest since a 10-session run from Dec. 30 to Jan. 14.
The move needs perspective. The won remains far stronger than in early July, when it closed at 1,555.8 per dollar on July 2.
The week’s political story ran through the Justice Ministry. At his confirmation hearing on Tuesday, nominee Kim Seung-won, a two-term Democratic Party lawmaker and former judge, faced allegations, which he denies, that in 2021 he pressed drug regulators to speed approval of a clinical trial for biotech firm Genencell’s COVID-19 treatment. He also faced scrutiny over a past drunk-driving conviction. On Thursday the ruling party adopted his hearing report in committee over the opposition’s objections.
On Friday a Gallup Korea poll put President Lee Jae Myung’s approval rating at 37%, the lowest of his term. At a press conference that morning, Lee attributed the decline to his own shortcomings. He asked lawmakers to remove a provision that would let a proposed special counsel, set up to examine allegedly fabricated prosecutions, withdraw existing indictments. He also acknowledged flaws in the rollout of single-stock leveraged ETFs and ruled out serving a second term.
On Saturday Kim withdrew, 20 days after he was nominated. “After deep consideration, I have decided to step down as nominee for justice minister,” he said, adding that Lee’s press conference had settled his decision. He is the second nominee from Lee’s latest reshuffle to pull out, after gender equality minister nominee Yong Hye-in.
On Thursday the National Assembly passed 51 follow-up bills, a day after the Legislation and Judiciary Committee approved them. They align Korea’s criminal justice laws with the Oct. 2 abolition of the Prosecutors’ Office, which will be replaced by a Public Prosecution Office handling indictments and a Serious Crimes Investigation Agency handling investigations.
The central amendment lets prosecutors request supplementary or renewed investigations from the new agency in seven categories of crime involving vulnerable victims, including child abuse, domestic violence, sexual crimes against children and adolescents, stalking, and the abuse of disabled and older people. Another amendment adds dismissal to the penalties available against prosecutors.
People Power Party floor leader Jeong Jeom-sig asked what basis had been used to choose the seven categories, and the party called the package rushed, coming two weeks before the laws take effect.
The same session confirmed Kim Sung-soo as a Supreme Court justice by 227 votes to 28, with 13 abstentions, and President Lee approved his appointment the next day, making him the first justice to take office under the current administration. A second seat remains open: the presidential office asked Chief Justice Jo Hee-de on Aug. 28 to resubmit his nominee for it, and OhmyNews reported that no new nomination had been made as of Sept. 18.
On Wednesday Prime Minister Han Seong-sook announced a phased plan to introduce medication abortion for pregnancies of up to nine weeks, with a target of the first quarter of 2027. The product under review is Hyundai Pharm’s Mifegymiso, a combination of mifepristone and misoprostol. For the first two years, doctors would prescribe and dispense the drugs directly at medical institutions; pharmacy dispensing would follow only once further safeguards are in place.
The plan followed a July instruction from President Lee to explore allowing the pills under medical supervision. An estimated 32,000 abortions took place in Korea in 2020, according to a government-affiliated think tank cited by the Associated Press, and a gynecologist quoted by the agency said most are surgical.
Korea is late by international standards. Abortion pills were approved in France in 1988, Britain in 1991, the United States in 2000 and Japan in 2023, and about 100 countries allowed them as of 2024, according to the gender equality ministry.
Reaction split. Women’s groups welcomed a wider choice, while the Catholic Church warned of disregard for life. Critics of the hospital-only phase said access could depend on where a woman lives.
The prelude came late the previous week, when drones launched from Iraq struck near Saudi Arabia’s East-West pipeline and Riyadh temporarily shut it down. The line can carry up to 7 million barrels a day to the Red Sea, bypassing the Strait of Hormuz.
On Sunday, Sept. 13, Oman postponed a meeting of Iran and Gulf states set for the next day in Salalah, without naming a new date. Iran’s foreign ministry blamed Saudi objections, and US outlets reported that Riyadh had submitted amendments to an Iran-Oman proposal. Bahrain said it would stay away until diplomatic ties with Iran were restored.
The dispute centered on who pays for passage. According to CNN, Iranian tolls remained widely rejected in the region, but voluntary contributions for navigational safety were under consideration. Trump administration officials privately told Gulf governments they wanted future talks with Tehran to focus on Iran’s nuclear program. Late in the week, Iran’s Revolutionary Guards said they had struck a Togo-flagged tanker attempting what they called an illegal passage.
Korea drew its own line on Friday. President Lee said there would be no deployment that involves Korea in the war, while adding that the country must protect its merchant ships, oil routes and citizens and is weighing a stronger role for the Cheonghae Unit, its naval contingent in the region.
The count from Sweden’s Sept. 13 election was finalized on Thursday. The four left-leaning parties led by Magdalena Andersson’s Social Democrats won 176 of 349 seats, against 173 for outgoing Prime Minister Ulf Kristersson’s right-wing bloc, which includes the anti-immigration Sweden Democrats. About 50,000 votes separated the two sides.
Kristersson resigned the same day. Andersson, who was Sweden’s first female prime minister in 2021–2022, now has to hold together a bloc divided over one question: the Centre Party opposes any government that gives the Left Party cabinet posts, and the Left Party insists on them.
Parliament can vote on a new prime minister on Sept. 29 at the earliest. Forming a government took 37 days after the 2022 election and 134 days after the 2018 vote.
The scale of the Aug. 26 glacial and mountain collapse on the Nepal-China border is still being counted. On Wednesday Nepal’s disaster authority raised the number of missing from 5,179 to 6,150 after verifying data from district offices. It has recovered 1,403 bodies, 105 of them identified.
In China, state media reported 43 dead and 519 missing, bringing the combined toll to 1,446 dead and at least 6,669 missing. Several hundred foreigners, including tourists and pilgrims, are among the missing.
They include nine Korean workers from Doosan Enerbility and Korea South-East Power who were building a hydropower project in the area. No new information about them emerged this week.
- Mon, Sept. 21 Korea’s trade data for Sept. 1–20 (Korea Customs Service, usually released on the 21st)
- Thu, Sept. 24 Trump hosts Xi Jinping in Washington. Extending the Busan trade truce, which expires in November, is expected to be on the agenda
- Thu–Sat, Sept. 24–26 Chuseok holiday in Korea; Korean financial markets closed Thursday and Friday
- Tue, Sept. 29 (week after next) Earliest date for Sweden’s parliament to vote on a new prime minister
- Fri, Oct. 2 (week after next) Korea’s Prosecutors’ Office is abolished; the Public Prosecution Office and the Serious Crimes Investigation Agency launch
The Federal Reserve’s first rate increase in more than three years had been signaled for weeks. On the day it reached Seoul, the KOSPI moved 0.04%.
Three days earlier, on the Monday after Anthropic chief executive Dario Amodei posted an essay about the pace of AI development, the same index fell 3.26%. Its two largest members are memory-chip makers, and chip stocks account for roughly half of its value. In Seoul, a debate about how fast AI models should improve turns quickly into a question about how many memory chips the world will buy.
Korean politics also ran on unusual timing. Laws to rewire the criminal justice system arrived 15 days before the new system starts. A justice minister nominee’s report cleared committee on Thursday, and he withdrew on Saturday. Medication abortion, by contrast, got a government rollout plan seven years and five months after the Constitutional Court ruled the criminal abortion ban unconstitutional.
Each of these now has a date. The new prosecution system starts on Oct. 2, and the abortion pill is aimed at early 2027. The first step in Amodei’s proposal is letting outside evaluators work inside AI labs with employee-like access. Whether each plan also comes with a way to check it once it starts is the question the coming months will answer.
Anthropic’s Claude AI is used as a tool in gathering, analyzing and editing the news. Readers are encouraged to use their own judgment and to cross-check.
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