The US inflation rate in October was 2.6% y/y from September’s 2.4%, which was in line with expectations but still above the US Federal Reserve (Fed) target of 2%. Core inflation, however, is at 3.3%, largely due to shelter prices, and there are other inflationary pressures which will require the Fed to be more cautious about making future interest rate cuts. While a 25 bps cut is still expected at the next meeting, the Fed is unlikely to be too aggressive with cuts in early 2025.

S&P has unexpectedly changed SA’s credit rating outlook from neutral to positive, although the rating, at BB-, is still well below investment grade. S&P cited the potential for SA’s growth rate to accelerate in the current policy environment and government’s intention to maintain fiscal discipline. This move was encouraging, but SA needs to make progress in the next 18-24 months if it is to win a rating upgrade.

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