President Lee Jae Myung convened a 7.5-hour closed-door meeting at Cheong Wa Dae on August 3, 2026, immediately after returning from the U.S. and South America. The session focused on addressing a “supply cliff” in housing and stock market volatility following a sharp decline in the KOSPI and his own approval ratings.
President Lee Jae Myung didn’t even wait to unpack. After arriving via helicopter on August 3 following an 11-day diplomatic tour of the U.S. and South America, the president went straight into a marathon session at Cheong Wa Dae. The meeting lasted from 3 p.m. until 10:30 p.m., with the president eating a boxed meal as he worked through a mounting domestic crisis involving real estate instability and a crashing stock market.
The 2026 Tax Reform Plan and the Housing Supply Cliff
The urgency of the meeting stems from what President Lee described as a supply cliff situation
caused by a housing shortage that has persisted since 2022.
Central to the discussion was the Ministry of Finance and Economy’s 2026 Tax Reform Plan. This plan introduces differential taxation for primary versus non-primary residences and raises comprehensive real estate tax rates for high-value homes priced around 4 billion Korean won. While the administration views this as a necessary lever, the opposition has been blunt, labeling the move a tax bomb
dropped immediately upon the president’s return.
KOSPI Crash and the Leveraged ETF Fallout
The financial sector is in a state of high alert. The closed-door meeting addressed a sharp decline in the KOSPI and the specific fallout resulting from single-stock leveraged ETFs.
Despite the length of the meeting, which included Prime Minister Han Seong-sook and Deputy Prime Minister for Economic Affairs Koo Yun-cheol, the government has not yet released a solution. A Cheong Wa Dae source noted that preparing special measures is currently difficult, citing emerging responsibility disputes
within the administration.
Approval Ratings and Internal Friction at Cheong Wa Dae
The president’s sense of crisis is mirrored in the data. A Realmeter survey conducted from July 27 to 31 found that 50.5% of respondents evaluated his performance negatively, while 45.9% viewed it positively—the lowest approval rating since he took office. Realmeter attributed this slide to a combination of the stock market crash, real estate tax reforms, the leveraged ETF fallout, and controversies over forced legislation to abolish the prosecution’s supplementary investigation authority and constitutional amendments regarding presidential term extensions.
This political pressure has sparked a blame game inside the palace. Specifically, Kim Yong-beom, the presidential chief of staff for policy, has become a target of criticism. During a press briefing in Brazil on July 28, Kim suggested that the dynamism of individual investors
was a primary driver of the stock market’s extreme volatility.
A Cheong Wa Dae source stated that it is highly inappropriate for the system’s designer to blame investors.
Weakening Coordination with the Ruling Party
The instability is not just a matter of policy, but of process. Members of the ruling party have expressed dissatisfaction with the current level of coordination, claiming the government introduced leveraged ETFs without prior consultation. Some party members pointed to the Moon Jae-in administration as a benchmark for closer inter-party consultation, suggesting that such coordination has weakened under President Lee.
As the administration grapples with these overlapping crises, a Cheong Wa Dae source admitted there are numerous issues the president needs to coordinate, leaving the government in a precarious position where internal disputes over responsibility are hindering the delivery of immediate market-stabilizing measures.
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