EDITORIAL: Rate-setters will tread softly
Uncertainty about the new Trump administration’s economic policies as well as domestic inflation concerns suggest caution
After its last meeting in November, the monetary policy committee began its statement with the comment that the global economic and political landscape had changed significantly following the US presidential election. As the committee gears up for its January meeting, which starts on Monday, US president-elect Donald Trump is being inaugurated and uncertainty about the new administration’s economic policies and what they might mean for the world is as great as ever. That suggests the committee will be as cautious now as it was then about the "elevated uncertainty" and the upside risks to the inflation rate because of possible shocks to the rand exchange rate. Not only is there the issue of the "Trump" trade and its possible impact on emerging market currencies, including the rand, but there are the hawkish statements of US Federal Reserve chairwoman Janet Yellen, who in recent days has reiterated that the Fed could raise rates a few times in 2017. The rand strengthened in 2016 for t...
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