4%의 벽을 넘은 물가, 중동의 포화가 시장의 시계를 멈추다 > K-wave Trends

The US consumer price index (CPI) in May rose 4.2% compared to the same period last year, breaking the highest since 2023, causing a great shock to the market. The fact that the price increase rate, which was only 2.4% last February, exceeded the 4% level in just a few months clearly shows how the surge in international oil prices due to the Iran war had a devastating impact on the real economy. In particular, energy prices showed a record surge of 3.9% compared to the previous month and 23.5% compared to the same month last year, which led to more than 60% of the total price increase. The steep rise in gasoline prices has weakened consumers' real purchasing power, which has taken a direct hit on the household economy and deepened concerns about an economic recession.

But the market wasn't just writing a completely hopeless scenario. It is somewhat comforting that the core CPI, excluding food and energy, rose only 0.2% compared to the previous month, falling below market expectations. This suggests that the energy price shock has not yet led to a ‘secondary price increase effect’ that spreads widely throughout the economy, such as in the service industry and wage increases. The fact that transportation services, new cars, and automobile insurance premiums have declined is also evidence that inflation has not entered uncontrollable territory. However, rigid prices such as housing costs still remain at a high level, indicating that it will take considerable time and pain to completely root out inflation.

These mixed economic indicators directly led to extreme volatility in the stock market. Ahead of the May CPI announcement, the Korean stock market created a panic market, with sidecars activated for two days in a row, coupled with large-scale selling by foreign investors. In particular, large-cap stocks such as Samsung Electronics and SK Hynix, which led the artificial intelligence (AI) semiconductor rally, fell significantly under pressure from profit-taking sales and rising exchange rates. As the won-dollar exchange rate soared to the 1,520 won range and a vicious cycle of encouraging foreign capital outflow was repeated, investors began to be skeptical about whether the U.S. Federal Reserve (Fed) would be able to play the interest rate cut card.

The concerns of the Federal Reserve, which is at the top of policy decisions, are bound to deepen. Initially, the market expected an interest rate cut within the year, but as the price index came out stronger than expected and the job market remained hot, experts are talking about not only freezing interest rates but even the possibility of further increases. Even economic experts are predicting a withdrawal of the easing policy ahead of the Federal Open Market Committee (FOMC) scheduled for the 16th and 17th. This means that the uncontrollable external variable of the Iran war is shaking the foundation of monetary policy, and that the 'soft landing' scenario pursued by the Federal Reserve has become inevitable amid the saturation of the Middle East.