Korean brokers assess Fed path after sticky October core CPI

iM Securities maintained its forecast of a Federal Reserve pause after a December rate increase in its Nov. 11 report. Eugene Investment & Securities, writing the same day, expects a 25bp December hike but warns that persistent core inflation could require further increases. That warning is a conditional risk, rather than a timetable for subsequent hikes.

U.S. consumer prices rose 0.4% from September on a seasonally adjusted basis, while core prices, excluding food and energy, rose 0.3% for a third consecutive month. Both reports cited market forecasts of 0.3% for headline CPI and 0.2% for core CPI. The Bureau of Labor Statistics released the figures at 10:30 p.m. KST on Nov. 10.

Korean equities had closed before the release. The KOSPI finished Nov. 10 at 5,239.13, up 4.39%, with Samsung Electronics gaining 4.74% and SK hynix rising 6.69%. Those gains preceded the U.S. inflation figures.

How broad were the price increases?

Energy prices rose 0.7%, slowing from September’s 5.2% increase, while food prices rose 0.5% after being unchanged. Shelter rose 0.3% and accounted for more than 30% of the monthly headline increase, according to the BLS release. Used-car and communication prices fell.

Higher energy and transportation costs were feeding into food prices, in Eugene’s assessment. Its analysts argued that cheaper oil could lower headline inflation without ending persistent core increases. They linked an end to the hiking cycle to monthly core inflation falling into the 0.2% range.

BLS did not publish year-on-year changes for headline or core CPI because the corresponding October 2025 indexes were unavailable following the government shutdown. Some individual categories still had annual comparisons.

How large a December increase?

The Fed held its target range at 3.75–4.00% on Oct. 28. A December increase of 25 basis points, or 25bp, would lift the range to 4.00–4.25%. That is Eugene’s base case; it considers a 50bp move less likely.

A larger increase remains possible in iM’s assessment, although the brokerage retains its forecast of a subsequent hold.

Kiwoom Securities’ Nov. 11 strategy report treated a 50bp increase as a minority scenario. The brokerage inferred that agreement on that size of move had not formed within the Fed, citing other officials’ lack of explicit support.

What supports the case for a pause?

Lower oil prices and easing annual wage growth underpin iM’s forecast. The brokerage expects cheaper energy to reduce November inflation and slower wage gains to ease services pressure gradually. It also acknowledges that supply-chain strains and investment-led growth could prevent inflation from slowing quickly.

Nominal hourly earnings growth for all private-sector employees eased to 3.1% year on year in October from 3.2% in September, BLS data show. On a seasonally adjusted monthly basis, however, growth accelerated to 0.4% from 0.3%. The brokerage’s wage chart uses annual growth; the monthly figures do not show the same moderation.

Nonfarm payrolls rose by 165,000 in October, according to the BLS employment report. Separately, inflation-adjusted average hourly earnings for all private-sector employees were unchanged from September, seasonally adjusted. BLS could not provide an annual real-earnings comparison because October 2025 CPI data were unavailable.

The New York Fed’s Nov. 9 survey release put median one-year-ahead inflation expectations at 3.9% in October, unchanged from September.