South African inflation under control; US President Trump signs a flurry of new orders

SA’s December annual inflation rate, at 3% (from 2.9% in November) was surprisingly low, showing few signs of pressure other than in administered services. This should encourage the Reserve Bank to cut interest rates at end-January by 25 bps to 7.5%. We expect the bank will remain cautious but will make a further rate cut to 7.25%, the neutral rate, by mid-year.
US President Donald Trump signed 36 executive orders in his first week. Some of the themes were: tariffs, where he imposed less than expected; energy and the environment, allowing for more exploration for oil and gas; border and immigration control; reversing various diversity and inclusion initiatives; and the federal workforce, where he introduced a hiring freeze and restructuring. For SA, new US policies on energy and immigration are likely to be the most significant at this stage. Click here to listen to the podcast.