[Click eStock] "US, Inflation Uncertainty Rises... Focus on Wages, Trump Tariffs"

Given the high uncertainty surrounding inflation (price increases), securities analysts have emphasized the need to carefully assess monetary policy and exchange rate direction while monitoring price trends.

On the 10th, Kyuyun Jeon, a researcher at Hana Securities, stated, "Prices and employment had been balanced but have started to tilt back toward prices." The U.S. Consumer Price Index (CPI) rose for two consecutive months after hitting a low of 2.4% in September last year, and the core CPI has remained steady at 3.3%. The December CPI, to be announced next week, is also expected to rise to 2.8%.

Typically, when central banks lower interest rates, borrowing becomes easier, leading to increased consumption and investment, which stimulates the economy. However, this also raises the possibility of fueling inflation (price increases). Since the primary goal of central banks is price stability, it is difficult to lower rates easily when inflation is high.

Researcher Jeon explained, "While the slowdown in services is gradual, goods prices have risen due to the fading energy base effect and increases in automobile prices," adding, "Heightened caution regarding price increases is inevitable for the time being. This may ease around the Federal Open Market Committee (FOMC) meeting in March."

The problem is that the U.S. service sector’s better-than-expected performance and the Trump administration’s second term tariffs and deportation of illegal immigrants could add further inflationary pressures.

Jeon said, "The December U.S. Institute for Supply Management (ISM) services index maintained expansion at 54.1 points, and concerns have grown that inflationary pressure may persist as payment prices surged among detailed items. In particular, labor cost burdens are consistently mentioned. Wage pressures in the service sector remain high, and if the Trump administration intensifies deportations of illegal immigrants, the reduction in low-wage labor could further increase wages."

The impact of tariffs imposed by major countries is also significant. Academic studies on the effects of the first round of tariffs under the Trump administration generally concluded that "tariff increases were fully reflected in import prices, and as import price burdens led the U.S. to reduce imports, household welfare declined."

Jeon noted, "The volatility of U.S. import prices may vary depending on who holds the pricing power after tariff increases," adding, "As retaliatory tariffs between trading countries escalate and the standoff intensifies, the upside risk to import prices may increase, warranting caution. It remains uncertain whether the rebound in prices will be temporary or become a trend."