Stagflation Signals Intensify: GDP 1.4%, Core PCE 3.0%, While KOSPI Hits ATH

Two data points released on February 20 changed the macro narrative:

GDP Q4 2025 printed 1.4% — the sharpest deceleration since the pandemic. Wall Street expected 3.0%. The government shutdown subtracted approximately 1.0 percentage points, but even adjusting for that, underlying growth came in around 2.4% — below trend.

Core PCE rose to 3.0% from 2.8%, topping the 2.9% consensus. Monthly core PCE increased 0.4%, the strongest gain in months.

Growth slowing. Inflation rising. The textbook definition of stagflation.

While US macro deteriorates, KOSPI hit an all-time high at 5,809 — up 34% year-to-date, making it the world's best-performing major index.

The driver: Samsung Electronics hit a record high after HBM4 chips were priced at approximately $700 per unit — a 30% premium over HBM3E. Operating margins are expected at 50-60%.

Samsung and SK Hynix together control roughly 80% of global HBM market share. The AI infrastructure buildout is creating structural demand regardless of US macro conditions.

Phase 1 — Data Divergence (Current): Growth metrics declining while inflation metrics rising simultaneously. GDP at 1.4% vs Core PCE at 3.0% is the clearest signal.

Phase 2 — Policy Paralysis: Central bank unable to cut rates (inflation too hot) or hike (growth too weak). This phase typically lasts 6-18 months. The Fed is entering this phase now.

Phase 3 — Forced Resolution: A crisis catalyst triggers decisive policy response. History shows this phase is where the biggest dislocations — and opportunities — occur.