Global
Real global economic growth has tilted up and is approaching the long-term trend of 3.5% per annum, and yet global interest rates remain at depressed levels. At 1.25%, the Federal Reserve’s Fed funds rate is high when measured against its peers (Bank of England’s clearing bank rate at 0.25% and the European Central Bank’s repo rate effectively at 0%). Yet it is by no stretch of the imagination high when measured against historical levels.
Monetary policymakers, especially outside of the US, are particularly dovish and very careful not to stifle economies with near-term interest rate increases. There are, however, pockets of strong growth around the world – the aggregate real GDP growth of emerging markets averages nearly 5% at the moment. Sadly, South Africa is the worst performing of these markets at around 0.5%.