JSE likely to stumble after Fed’s hawkish pivot

The JSE faces pressure on Thursday, with Asian markets slipping after the US Federal Reserve played down the prospect of more interest rate cuts in 2019.

The Fed cut interest rates by 25 basis points on Wednesday evening, as expected, and cited uncertainty over the US-China trade war. There was, however, division among policymakers and the Fed has reduced expectations of another cut in December.

“With the US economy experiencing around 2% growth, which is fairly decent, the Fed is exercising caution over further precautionary rate cuts at this time,”  deVere Group CEO Nigel Green said in a note.

US President Donald Trump immediately criticised the Fed’s messaging, with some analysts saying the central bank may have wanted to emphasise its independence in the face of his repeated calls for further cuts.