The week in perspective
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Markets have clearly been anxious in the lead up to Jackson Hole, as investors and traders await the next policy clues out of Fed Chair Powell later this week.
The declines in equities and bonds of late suggest that Powell will strike a hawkish tone to fight rampant inflation, at the expense of economic growth. If Powell’s commentary forces markets to further price in more supersized Fed rate hikes, that might trigger more declines for equities and gold, while king dollar would continue to exert its dominance across the FX universe.
Finance Minister Enoch Godongwana under siege after sex allegations: Finance Minister G. odongwana had indicated he will step aside if formally charged on these allegations. While the legal process must obviously now take its course, there are clearly unintended economic consequences that could follow for SA if Godongwana does soon have to step aside or even resign as Finance Minister. Immediately ahead lie challenges such as the medium Budget in October, the resumed key public sector wage negotiations and the ANC’s elective conference policy recommendations on issues such as the status of the SARB - all of which require experienced and smart policy footwork.
Lots to discuss with Warwick Lucas Head of Galileo Securities; Isaah Mhlanga, Chief Economist at Alexforbes & Raymond Parsons, professor in the School of Business and Governance at Northwest University
The declines in equities and bonds of late suggest that Powell will strike a hawkish tone to fight rampant inflation, at the expense of economic growth. If Powell’s commentary forces markets to further price in more supersized Fed rate hikes, that might trigger more declines for equities and gold, while king dollar would continue to exert its dominance across the FX universe.
Finance Minister Enoch Godongwana under siege after sex allegations: Finance Minister G. odongwana had indicated he will step aside if formally charged on these allegations. While the legal process must obviously now take its course, there are clearly unintended economic consequences that could follow for SA if Godongwana does soon have to step aside or even resign as Finance Minister. Immediately ahead lie challenges such as the medium Budget in October, the resumed key public sector wage negotiations and the ANC’s elective conference policy recommendations on issues such as the status of the SARB - all of which require experienced and smart policy footwork.
Lots to discuss with Warwick Lucas Head of Galileo Securities; Isaah Mhlanga, Chief Economist at Alexforbes & Raymond Parsons, professor in the School of Business and Governance at Northwest University
