Ripple Effect: US CPI & The Korean Stock Market
An interactive analysis of the US Consumer Price Index's impact on key domestic industries.
Executive Summary
The latest U.S. Consumer Price Index (CPI) data suggests persistent inflationary pressures, reinforcing the Federal Reserve's "higher-for-longer" stance. This macroeconomic environment asymmetrically impacts the South Korean stock market through interest rates, exchange rates, and capital flows. This analysis delves into five key industries (Semiconductors, Automotive, Biotech, IT/Platform, Chemicals) to analyze their responses to these variables. Semiconductors, buoyed by AI demand, and Automotive, benefiting from favorable exchange rates and strong hybrid vehicle sales, show relative resilience. In contrast, industries sensitive to domestic demand and commodity prices, like Chemicals and IT/Platform, are expected to face continued pressure.
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Latest US CPI (YoY)
2.7%
Slightly above market forecast (2.6%)
KOSPI Shiller CAPE
12.60
Undervalued compared to major markets
KRW/USD Exchange Rate
1,385 KRW
Strong dollar trend persists
Macro Channels: From US Prices to Korean Stocks
U.S. CPI data impacts the Korean stock market through three key channels driven by the Fed's monetary policy: interest rates, exchange rates, and capital flows. Their interplay creates an asymmetric risk structure for the Korean market, with the exchange rate channel being the most critical variable differentiating industry performance.
1. Interest Rate Channel
High U.S. interest rates widen the Korea-U.S. rate differential, constraining the Bank of Korea's policy flexibility and applying upward pressure on domestic market rates.
2. Exchange Rate Channel
The Fed's hawkish stance leads to a stronger dollar (weaker won). This benefits exporters (Automotive) but hurts importers of raw materials (Chemicals), creating a clear divide among industries.
3. Capital Flow Channel
Rising U.S. rates encourage a "flight to safety," increasing the risk of capital outflows from the Korean market, which has a high proportion of foreign investors.
Industry Deep-Dive
Select an industry to analyze its business model, financial health, and relationship with the macroeconomic environment.
Select an industry above to view the detailed analysis.
H2 2025 Scenario Analysis
Forecasts for domestic industry impact based on three potential U.S. economic paths. Click the scenario buttons to see the results.
Through the Eyes of Global Investors
How would 10 types of hypothetical investors with different philosophies view the current market? Click the cards for details.
