EDITORIAL: Rand flies with dove-like Fed
The unknown unknown is US President Donald Trump’s economic policies — there’s a growing view he might prove to be much more ineffectual than expected
Who would have thought it? The Federal Reserve hikes US interest rates and the rand heads to its best levels in 19 months. The only one of 150 currencies that advanced by more than the rand on Thursday, after the Fed decision, was the Seychelles rupee, Bloomberg reported. It was a very far cry from the "taper tantrum", which crashed the rand and other emerging market currencies in 2013, when the Fed first announced its intention to start normalising monetary policy. But the world has changed since then and so has the Fed, which has lately been managing expectations much more effectively than it used to. The 25-basis-point rate hike it opted for on Wednesday, which was only the third in the hiking cycle that began in December 2015, was widely expected. It had been almost 100% priced in by the market, which was waiting only to see what the Fed said, rather than what it did. The US economic recovery is now well under way. The global financial crisis damaged the growth potential of all ...
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