Fed Chair Powell: "No Need to Rush Rate Cuts"...Mixed New York Stock Market [Morning Briefing]

◆ Fed Chair Powell: "US Economy Strong...No Need to Rush Rate Cuts"

Jerome Powell, the Chair of the US Federal Reserve (Fed), reaffirmed on the 11th local time that there is no need to rush a rate cut given the strong growth of the US economy and the current inflation rate exceeding the target level (2%). At the Senate hearing held that day, Powell stated, "The Fed's current monetary policy stance has become significantly less restrictive than before, and the economy remains strong," adding, "We do not need to rush policy adjustments." Powell also mentioned, "Reducing the degree of tightening too quickly and too much can hinder inflation progress," while "reducing it too slowly and too little can risk weakening economic activity and employment."

◆ New York Stock Market Mixed Amid Tariff War Concerns and Cautious Stance on Rate Cuts

The three major indices of the New York Stock Exchange showed mixed trends on the 11th local time. The market digested the expansion of the 'tariff war' with US President Donald Trump's additional tariffs on China, including steel and aluminum, along with Fed Chair Jerome Powell's reaffirmation of the need not to rush a rate cut. The three major indices, which fluctuated during the day, ended the session with mixed directions. On the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 44,593.65, up 123.24 points (0.28%) from the previous session. The Standard & Poor's (S&P) 500 Index rose 2.06 points (0.03%) to 6,068.50, while the Nasdaq Composite Index fell 70.41 points (0.36%) to 19,643.86.

◆ International Oil Prices Rise for Third Day on Potential Supply Constraints from Russia and Iran

International oil prices continued their upward trend for the third day. Concerns over supply constraints of Russian and Iranian crude oil, which are under US sanctions, led to the rise in oil prices. On the New York Mercantile Exchange, the March delivery of West Texas Intermediate (WTI) closed at $73.32 per barrel, up $1.00 (1.38%) from the previous session. The global benchmark Brent crude for April delivery finished at $77.00 per barrel, up $1.13 (1.49%).

◆ National Assembly to Hold Three-Day Government Inquiry...Clash Expected Over Martial Law and Impeachment

The National Assembly will begin a three-day government inquiry starting today. The inquiry will start with politics, diplomacy, unification, and security on the 13th, followed by economy on the 14th, and education, society, and culture on the 15th. The People Power Party claims that the cause of the martial law situation lies in the legislative dictatorship of the opposition parties, including the Democratic Party of Korea, while criticizing the duality of Democratic Party leader Lee Jae-myung, who has recently shown a 'right-click' move under the banner of pragmatism. It is also expected to point out the ideological bias and unfairness controversy of the Constitutional Court regarding President Yoon Suk-yeol's impeachment trial. The Democratic Party plans to launch an offensive, defining the People Power Party as a force supporting rebellion, in relation to the martial law situation.

◆ Only 48 Out of 122 Companies Accept Refund Adjustment for Tmon and Wemakeprice...Heading to Class Action

Only 48 out of 122 companies accepted the collective adjustment proposal for victims of the large-scale non-settlement incident of travel and accommodation products by Tmon and Wemakeprice last year, accounting for 39.3%. According to the Consumer Dispute Resolution Committee of the Korea Consumer Agency, out of 106 sellers, including Tmon, Wemakeprice, and travel agencies, 42 accepted the proposal, and out of 14 electronic payment agencies (PG companies), 4 accepted it. Most travel agencies expressed their inability to accept the adjustment proposal, with the expected refund amount being only 16 billion won out of the 13.5 billion won damage amount. The Korea Consumer Agency decided to support victims in filing a class action lawsuit. Previously, in December last year, the dispute resolution committee announced an adjustment proposal for sellers, including travel agencies, to refund up to 90% and PG companies up to 30% in solidarity with Tmon to the victims.

◆ Financial Companies' Retirement Pension Fees Balloon to 1.7 Trillion Won Last Year

As retirement pension reserves increase every year, the fees that financial companies charge subscribers for retirement pensions have also increased. According to the 'Retirement Pension Comparison Disclosure' data from the Financial Supervisory Service's Integrated Pension Portal, the total fees paid by subscribers (companies or individuals) of defined benefit (DB), defined contribution (DC), and individual retirement pension (IRP) to financial companies, the retirement pension operators, amounted to 1.684 trillion won last year. The fee scale has gradually increased from 886 billion won in 2018, surpassing 1 trillion won in 2020 with 1.077 trillion won, and further to 1.232 trillion won in 2021, 1.323 trillion won in 2022, and 1.421 trillion won in 2023. Among the top financial companies, Shinhan Bank had the highest fee income last year with 211.6 billion won, followed by KB Kookmin Bank (206.4 billion won), Samsung Life Insurance (171.4 billion won), Hana Bank (166.3 billion won), Woori Bank (128.4 billion won), IBK Industrial Bank of Korea (126.9 billion won), and Mirae Asset Securities (108.9 billion won).

◆ Cloudy and Snowy/Showery Nationwide on Jeongwol Daeboreum...Clearing Gradually from Afternoon

On Jeongwol Daeboreum, which falls on Wednesday the 12th, the nation will be mostly cloudy with snow or rain, gradually clearing from the night. There is a possibility of heavy snow advisories being issued as strong snow of 1-3 cm per hour is expected in the morning, mainly in the metropolitan area, inland and mountainous areas of Gangwon, northern Chungbuk, northeastern inland and mountainous areas of Gyeongbuk, and inland areas of Jeolla. Snow and rain will gradually stop from the afternoon in the western regions, but some areas such as inland and mountainous areas of Gangwon, northern Chungbuk, Jeolla region, northeastern inland of Gyeongbuk, western inland of Gyeongnam, and Jeju Island may continue until the evening. Snow accumulation of 3-8 cm is expected in Seoul, Incheon, Gyeonggi, and inland and mountainous areas of Gangwon, central and northern Chungbuk, and northeastern inland and mountainous areas of Gyeongbuk. In eastern Gyeonggi and inland and mountainous areas of Gangwon, more than 10 cm of snow is forecasted. The highest daytime temperature is expected to be similar to the average, ranging from 2 to 12 degrees.

Oh Jeong-min Hankyung.com reporter blooming@hankyung.com