Lukanyo Mnyanda Editor: Business Day

Is it possible that Donald Trump could have done Reserve Bank governor Lesetja Kganyago a favour? Much has been said about the dramatic policy U-turn from the US Federal Reserve last week, prompting some traders to speculate that the next move in rates may even be lower rather than higher. Considering that the Fed chair, Jay Powell, and his committee were as recently as December priming the market for two rate increases in 2019, suspicion will linger that he bowed to pressure from the US president, who in 2018 described the Fed hikes as “crazy” and expressed regret that he had appointed Powell. While there has been no noticeable slowdown in the US economy — in fact Friday’s jobs report signalled it was still powering ahead, with hiring beating all forecasts —the Fed startled policy watchers last week by telling investors it was ready to pause rate hikes, and even left open the possibility of a cut. It seems like Powell hadn’t read the memo about good policy-making being by definitio...

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