What does the end of ‘Zirp’ mean for the JSE?
The US Fed is expected to put the final nail in the coffin of the zero interest rate policy era at 7pm by raising its target range to 2.5%
The JSE received mixed signals from Asian markets on Wednesday morning as investors wait for the US Federal Reserve's interest-rate decision at 7pm South African time.
Federal Reserve chair Jerome Powell is expected to announce a 25 basis-points increase, taking the ceiling of the US central bank's target range to 2.5%.
A final US interest-rate increase would take 2018's total to four, matching 2017's.
The past two years have seen the US central bank end an era commonly known as “Zirp” — zero interest rate policy.
Interest rates were rapidly cut from 5.25% in August 2007 to 0.25% in December 2008 in response to the global economic crisis.
Though the ceiling of the Fed's target range from December 2008 to December 2016 was 0.25%, the name Zirp was derived from the 0% floor of the target range.
The economists' consensus is the Fed will raise interest rates for the fourth time in 2018 at 7pm, but there are dissenters who argue the recent drop in Wall Street and signs of a weakening US economy may make it pause.
Asian markets were generally down with Tokyo's Nikkei 225 index falling 0.69% and Sydney's ASX 200 down 0.16%, but Hong Kong's Hang Seng index up 0.12%.
The rand was trading at R14.31/$, R16.32/€ and R18.15/£.