top of page

Market Commentary | The week that was

Updated: Jan 24, 2023

Last week the US Federal Reserve (FED) met to discuss the prime interest rate policy after the country’s inflation rate had reached its highest level in 40 years. According to FED Chairman, Jerome Powell, asset purchases are likely to stop in March, and interest rates may soon be increased for the first time in more than three years. Equities have been on the back foot since the start of the year as market participants are concerned about how fast the FED may move to contain inflation. Powell stated: "This is going to be a year in which we move steadily away from the very highly accommodative monetary policy that has been put in place to deal with the economic effects of the pandemic".

Locally, it was widely anticipated that the South African Reserve Bank (SARB) would increase its prime interest rate by 25 basis points. The SARB announcement last week was in line with expectations, the interest rate is now 4% and the prime lending rate at 7.5%. Apparently, four members of the Monetary Policy Committee voted in favour of a rate hike, while one member voted against an increase.

Looking at the week ahead: Stats SA will release new weights for the Consumer Price Index (CPI); and preparations will begin for Pres Cyril Ramaphosa’s State of the Nation Address (SONA) on the 10th of February.

0 views0 comments

Recent Posts

See All
bottom of page