[Morning Briefing] Concerns mount over US central bank independence amid 'Powell probe'… Japan-South Korea summit in focus

◆ US stocks close higher on bargain buying despite caution over Powell probe

Wall Street’s three major indexes ended modestly higher. On the 12th local time, the Dow Jones Industrial Average rose 0.17% from the previous session to 49,590.20, the S&P 500 gained 0.16% to 6,977.27, and the Nasdaq advanced 0.26% to 23,733.90. Equities reacted sensitively as concerns grew over the independence of the US central bank (Fed) after the Trump administration launched an investigation targeting Powell that could lead to criminal charges. As bargain hunting flowed in, the S&P 500 and the Dow both notched record highs on a closing basis.

◆ US Justice Department moves to probe Powell… Yellen: "Deeply chilling"

A head-on clash is unfolding between the US president and the head of the central bank (Fed). Fed Chair Jerome Powell disclosed that he had received a grand jury subpoena and a threat of criminal prosecution from the Justice Department over costs related to renovations of the Fed headquarters. Powell views it as retaliation for resisting President Trump’s pressure to cut interest rates. Powell said, "This unprecedented act must be seen in the context of threats and sustained pressure from the administration," adding, "This is a pretext." In response, US economists, including former Fed chairs, issued a statement saying the Fed’s independence must not be undermined. Former Chair Alan Greenspan stressed, "It’s deeply chilling. It’s something the market should be worried about."

◆ President Lee to hold 1-night, 2-day Japan-South Korea summit in Nara Prefecture today

President Lee Jae-myung will visit Japan’s Nara Prefecture for a 1-night, 2-day trip at the invitation of Japanese Prime Minister Sanae Takaichi. President Lee is scheduled to arrive in Nara Prefecture in the afternoon and hold a one-on-one meeting, an expanded meeting, and a joint press briefing with Prime Minister Takaichi. With tensions between China and Japan escalating, attention is focused on what the two leaders will discuss. There is also interest in whether historical issues—an enduring bilateral dispute—will be addressed. National Security Office Director Wi Sung-lac said in a pre-briefing that historical issues and accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) could be put on the table.

◆ Seoul city buses begin indefinite strike… Seoul rolls out emergency transport measures

Seoul city buses began an indefinite strike starting with the first runs on the 13th after wage and collective bargaining talks between the Seoul City Bus Labor Union under the Korean Automobile and Transport Workers’ Federation and the management-side Seoul City Bus Transport Business Association broke down. The sticking point was the labor-cost burden arising from recognizing bonuses as ordinary wages in line with a Supreme Court ruling. Management proposed a 10.3% wage increase while including bonuses in base pay, while the union demanded a 3% wage increase without negotiations on ordinary wages. Management’s view is that this would raise wages by about 20%. As the union launched an indefinite strike, the Seoul Metropolitan Government implemented emergency transport measures, increasing subway services by 172 trips a day and deploying 670 shuttle buses.

◆ Lows to fall to minus 8°C… caution urged for icy roads

On Tuesday the 13th, the nation will be mostly cloudy before gradually clearing from morning. According to the Korea Meteorological Administration, rain or snow is expected in parts of the central region, with heavy snow possible in northern inland Gyeonggi and inland and mountainous areas of Gangwon. Forecast snowfall amounts include △around 1 cm in Seoul, Incheon and southwestern Gyeonggi △2–7 cm in northeastern Gyeonggi △1–5 cm in northwestern and southeastern Gyeonggi △3–8 cm in inland and mountainous Gangwon △1–5 cm in central and northern Chungbuk. In areas where snow accumulates, caution is needed as roads may become icy or develop black ice. Morning lows will range from -8 to 5°C, and daytime highs from -6 to 8°C. Fine dust levels are expected to be in the 'good' to 'moderate' range nationwide.

Oh Se-seong, Hankyung.com reporter sesung@hankyung.com