Global financial markets remain relatively and watchfully calm for now, with the ceasefire between Iran and Israel having taken effect, while locally, the dismissal of the DA Deputy Minister Andrew Whitfield has again threatened the stability of the GNU.
International Market Developments
With little clarity over where tariffs will settle, the FOMC has maintained its wait-and-see approach towards policy changes, batting away calls from President Trump for sharply lower rates. Chair Jerome Powell noted that the Fed is still struggling to determine the impact of tariffs on consumer prices. Powell reiterated his view that the Fed is not in any hurry to continue trimming borrowing costs, citing the strong economy and uncertainty over how tariffs may affect inflation. Fed governors Michelle Bowman and Christopher Waller recently signalled that they would support an interest rate cut as early as the July FOMC meeting, if inflation remains subdued.
Trump once again criticised Powell’s decisions as Fed Chair, continuing with his pressure campaign on the Fed chair to lower interest rates. He has been pushing for rate cuts, saying the central bank is keeping borrowing costs for the US government high. President Trump commented that he has three or four people in mind to succeed Fed Chair Jerome Powell when his term ends in May 2026.
A surprise US strike on three of Iran’s nuclear facilities threatened to escalate tensions in the Middle East, causing oil and gas prices to spike. A ceasefire has been agreed between Iran and Israel, following Iranian missile attack on a US military base in Qatar. Iran had warned the Qataris of its intentions beforehand, allowing non-essential staff at the base to be evacuated prior to the attack, and the Iranian missiles were successfully intercepted. US President Donald Trump claimed a major victory, stating that the ceasefire is now in effect. Markets though remain relatively calm for now, with the ceasefire between Iran and Israel holding, helping to soothe fears of rising energy prices.
Local Market Developments
Last week, it was revealed that President Ramaphosa had dismissed DA Deputy Minister of DTIC Andrew Whitfield from Cabinet. This, together with the DA’s response to it, has again threatened the stability of the GNU. The reason President Ramaphosa dismissed Mr Whitfield was that Mr Whitfield had travelled abroad (to the US, in February) without the president’s approval. According to DA leader John Steenhuisen, such approval had been applied for, though the president did not respond to this application. Mr Whitfield then embarked on the trip, which was funded by the DA, and, on his return, sent a letter to President Ramaphosa apologising for any offence he may have caused by doing so.
Following the dismissal, Mr. Steenhuisen railed against the decision to remove Mr. Whitfield, accusing the president of hypocrisy in this move. The DA then provided the president with an ‘ultimatum’ to fire ministers the party believes to be compromised within the next 48 hours.
However, the Presidency asked the DA for a replacement deputy minister and has argued that there are no reasonable grounds for an ultimatum as the DA deputy minister had broken travel rules.