ECONOMIC AND MARKET OVERVIEW

The Federal Reserve approved its first interest rate cut of the year, lowering the federal funds rate by 25 basis points to a target range of 4.00% – 4.25%. The decision, supported by all but one voting member, reflected growing concern over a softening labour market and persistent inflation. Chair Jerome Powell described the move as “risk management,” citing elevated downside risks to employment. The Fed signalled two further cuts before year-end, though uncertainty remains high amid a government shutdown that has delayed key economic
data releases.

The South African Reserve Bank (SARB) held its repo rate steady at 7.00%, pausing after two consecutive cuts earlier in the year. Governor Lesetja Kganyago noted that while second-quarter GDP surprised to the upside, inflation risks—particularly from electricity and food—remain elevated. The SARB reaffirmed its commitment to anchoring inflation at the lower end of its 3–6% target range, with the preferred level now set at 3%. The decision was split, with four members voting to hold and two favouring another cut.

President Donald Trump made an unprecedented second state visit to the United Kingdom from 16–18 September. Hosted by King Charles III at Windsor Castle, the visit featured ceremonial pageantry including a carriage procession, military flypast, and a state banquet. Trump met Prime Minister Keir Starmer at Chequers, where they discussed trade, immigration, and foreign policy. The visit also marked the launch of a US–UK technology-focused partnership focused on AI, quantum computing, and rare earth minerals

South Africa’s trade delegation, led by President Cyril Ramaphosa and Minister Parks Tau, visited the United States to strengthen bilateral ties. The delegation participated in the SA–USA Trade and Investment Dialogue in New York and held talks with US Trade Representative Ambassador Jamieson Greer. Key topics included market access, investment promotion, and trade facilitation. The visit coincided with the UN General Assembly, where Ramaphosa reiterated calls for multilateral reform and inclusive global governance.

In China, economic policy remained expansionary amid continued pressure on growth. The People’s Bank of China injected liquidity via medium-term lending facilities and reduced reserve requirements for select banks. Meanwhile, Beijing accelerated disbursement of previously announced infrastructure bonds and signalled further fiscal support for local governments. Despite these measures, property sector weakness and subdued consumer sentiment continue to weigh on recovery prospects.

The US government shut down on 1 October 2025, because Congress failed to pass a funding bill for the 2026 fiscal year due to deep partisan disagreements. The core issues were proposed cuts to Medicaid and the expiration of Affordable Care Act subsidies. Democrats demanded the reversal of those cuts and an extension of the subsidies as part of the funding package, while Republicans – who control both chambers – insisted those matters be handled separately. With neither side willing to compromise, the previous continuing resolution expired, triggering the shutdown.