SA’s inflation trajectory is encouraging, in the short term. The September inflation rate, at 3.8%, was down from 4.4% in August, with core inflation at 4.1%, and the impact of falling fuel prices should help to move inflation down to 3.1% in October. This trend should encourage the South African Reserve Bank to keep cutting interest rates, with a 25 bps reduction expected in November.

Various uncertainties face the US economy. If the US presidential election results in a Donald Trump win, as polls are indicating, it would be followed by policy change. Several indicators suggest the US economy is growing strongly, putting pressure on inflation and making future interest rate cuts less predictable. The key indicator to watch will be the strength of the labour market.