With the first quarter of the year behind us, the global economy remains resilient despite interest rates being at levels last seen decades ago. In the US, growth in consumer spending is still solid, with household incomes benefiting from ongoing job creation and reasonable wage growth. The Federal Reserve kept rates unchanged at its March policy meeting, despite recent inflation data coming in a bit higher than expected and showing signs of stickiness. Notably, however, the Fed’s ‘dot plot’ projection still points to three 25 basis points rate cuts this year, despite inflation and growth forecasts being marked up somewhat.
Global markets were buoyed by this renewed optimism of imminent US rate cuts. The MSCI World Index ended March 3.3% higher, with the major US, UK and Asian market indices all recording monthly gains. On the local front, after lagging global markets in January and February, the JSE bounced back in March, with the All Share Index gaining 2.5%.