SOUTH AFRICA: ANC Expected To Back Down On VAT Hike After 'Constructive' Talks
Apr-14 06:32
- The Sunday Times reported that the African National Congress (ANC) was 'likely to drop its insistence on a VAT hike in this year’s budget, amid indications that none of the parties it held talks with this week would support it.' This was then echoed by IOL, which reported that the ANC 'had failed to convince others to support the VAT hike" and "if we are going to keep the GNU going and not alienate other organisations I think it's time we listen.'
- The ANC's failure to persuade other parties to support the planned VAT hike increases pressure on Finance Minister Enoch Godongwana to come up with alternative ideas to plug the fiscal hole without raising taxes.
- Business Day reported that the ANC's top brass will use today's meeting take stock of the latest consultations with the DA, EFF and MK Party amid 'zero' support for a VAT hike.
- This comes after the ANC held 'constructive' talks with the Democratic Alliance (DA) and Freedom Front Plus (FF+) to resolve the dispute over their refusal to back the 2025 National Budget. DA Federal Chair Helen Zille told the media that he party has no intention to leave the Government of National Unity (GNU) and wants to continue pushing for its agenda.
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FED: March Economic Projections: Higher Inflation, Weaker Growth, Same Rates
Mar-14 21:28
The MNI Markets Team’s expectations for the updated Economic Projections in the March SEP are below.
- The unemployment rate is likely to rise slightly for 2025 alongside a downgrade in GDP growth, while the 2025 core and headline PCE inflation projections are set to rise again. Changes to later years will likely be limited, however.
- More detail on the shift in Fed funds rate medians is in our meeting preview - we will add more color next week.
FED: Market Pricing Nearly 3 2025 Cuts As Conditions Tighten
Mar-14 21:25
Amid rising government policy uncertainty, sentiment among businesses and consumers has fallen sharply since the start of the year, while equities and the dollar have reversed their post-election rise. Overall, financial conditions have tightened, even if stress is not yet mounting, e.g. no major widening of credit spreads (the accompanying chart shows the Fed’s financial conditions impulse index but only through January).
- Combined with growth fears, this has affected expectations for the Fed’s rate path, with around 18bp more cuts expected in 2025 compared with what was seen after the January FOMC. 65bp of cuts are priced for the year as a whole. 2025 cut pricing reached 71bp before the February inflation data and 76bp before the February payrolls report.
- A rate cut is seen with near zero probability for March’s meeting, but the first full cut is just about priced for June, with a second nearly priced by September.
- Chair Powell has no reason to endorse or refute these expectations – he’s likely to be happy with a press conference that ends with little discernable change in pricing.
CANADA'S CARNEY ANNOUNCES ELIMINATION OF THE CONSUMER CARBON TAX
Mar-14 21:17
- CANADA'S CARNEY ANNOUNCES ELIMINATION OF THE CONSUMER CARBON TAX
