During the first week of May, the Federal Reserve (Fed) in the United States (US) increased interest rates by 0.5%, the first time since 2000. Later, during the last week of the month, the South African Reserve Bank (SARB) followed suit.
In a daring move, the South African Reserve Bank (SARB) last week decided to increase interest rates by 0.5%, despite the pressure that it will undoubtedly place on South African consumers. Although 15 out of the 24 analysts that were surveyed, expected a 0.5% increase, I cannot help but wonder if it was not a little too much.
Benjamin Franklin said that “in this world, nothing can be said to be certain, except death and taxes”. This quote applies to most countries, as it does to South Africa. Death and taxes go together in the form of inheritance tax. Personal tax is levied on the income that a deceased person received before their death in the current tax year, whereas inheritance taxes are levied on what they leave behind in their Will in the form of estate duty.
Following the severe floods in KwaZulu-Natal, many companies have suspended their operations to recover and to restore damaged equipment and infrastructure.
In the past week uncertainty caused volatility in global stock markets to drag on. Uncertainty about war, commodity prices, inflation, interest rate increases, lockdowns in China, global economic growth, and the likes, are all keeping investors, and the markets that they represent, both nervous and restless.
The South African Reserve Bank (SARB) has, again, increased interest rates by 0.25%. This is the third increase since December 2021, bringing the repurchase, or policy, rate that the SARB offers banks up to 4.25%.
Between all the headlines of war, interest rate hikes, volatile markets, and the concerns emanating from these, theories about an upcoming recession are becoming ever-more frequent.
Flexible income funds can invest in various income-generating instruments, such as bonds, property, and global, to
enhance the yield above money market rates. The ongoing Russia-Ukraine crisis resulted in negative market sentiment
and higher inflation expectations, which have had a negative impact on these asset classes.
As the war in the Ukraine continues, you might have heard some rumours about fuel prices in South Africa (SA). Some commentators that I would not refer to as experts even believe that fuel prices can reach R40 a litre.
The whole world continues to look on in disbelief as Russia’s invasion of the Ukraine drags on, despite heavy sanctions and the seizing of assets from anything or anyone related to Russia.
