Globally, US President Trump confirmed that he has decided who will succeed Jerome Powell as Fed Chair and locally Moody’s kept its credit rating of South Africa unchanged.
International Market Developments
President Trump confirmed that he has decided who will succeed Jerome Powell as Fed Chair, though he declined to reveal the name. President Trump reiterated his expectation that the nominee will pursue aggressive interest rate cuts, aligning with his long-standing criticism of Fed Chair Jerome Powell for, in Trump’s view, not lowering rates quickly enough. The President plans to announce his choice for the next Fed chair in early 2026.
The US FOMC is due to meet this week and is expected to cut the Fed funds rate by 25 bps. The new dot plot is expected to be largely unchanged from September’s, signalling one rate cut (25 bps) in 2026.
Local Market Developments
Moody’s kept its credit rating of South Africa unchanged, saying this reflected the country’s low growth potential. Moody’s has completed its periodic review of SA’s sovereign ratings, reassessing their appropriateness considering relevant methodologies and recent developments. The agency said the stable outlook reflects expectations that, although economic growth should improve, it will remain modest, and the government’s debt burden will stay high but broadly stable over the medium term.
Moody’s expects ongoing reforms to strengthen electricity supply and gradually improve logistics performance, supporting growth that could rise to 1.8% by 2027. The stable outlook assumes a continued, gradual consolidation of public finances through consistent primary surpluses. Moody’s added that upward pressure on the rating could emerge if SA’s growth outperforms expectations in the coming years, enabling a substantial reduction in government debt
The SARB announced that the Johannesburg Interbank Average Rate (JIBAR) will be permanently discontinued, with its final publication to occur on 31 December 2026. From that date onwards, JIBAR will no longer be representative. The transition will shift South Africa’s benchmark rate system to the South African Rand Overnight Index Average (ZARONIA).