Global News: Fed cuts by a quarter point, indicates fewer reductions ahead.
Senate proposes foreign currency ban for local transactions.
The Federal Reserve on Wednesday lowered its key interest rate by a quarter percentage point, the third consecutive reduction and one that came with a cautionary tone about additional cuts in coming years.
Our thoughts
So it’s not news that the Feds have been cutting rates. But what’s news is that the speed of the rate cuts is going to be slower than expected in 2025.
Why?
They don’t not cut rates because they can, They cut rates as inflation and unemployment drop or stay stable. is OK. While unemployment data is OK, Inflation is proving stubborn lol.
Impact: We may not see the anticipated jump in stock prices. What we will see is specific companies well-positioned for the political and economic environment do very well in the market. Bond prices will also go up, real estate might take some time to adjust also. The theme for 2025: Cautiously Bold
African News: Africa Free Trade: Uganda Exports Dairy, Coffee and Pharmaceuticals to Nigeria.
President Museveni has commissioned the Free Zones Export Facility at Entebbe International Airport and also launched the African Continental Free Trade Area Implementation strategy for Uganda.
Our thoughts
This is how history is rewritten. Slowly but surely, we will begin to see a lot more African-made products on our shelves. What can you sell to Africans? How can you support trade?
Though it seems really, really slow, Africa is the next frontier to conquer. As you consider the developed north, have a footprint or two in one or 2 African countries.
Nigerian News: Senate proposes foreign currency ban for local transactions.
The Senate, on Tuesday, passed for first reading a bill to ban the use of foreign currencies for payments and transactions within Nigeria. The proposed legislation, aimed at ensuring all payments, including salaries and transactions, are conducted in naira, seeks to eliminate discriminatory practices and strengthen confidence in the local currency.
Our thoughts
This is a good one for Nigeria (If the law makers and their cronies actually align).
If you wire USD to the UK, the recipient will receive it in GBP. For you to trade USD in the UK, you are either the highest "H" in HNI or an investment banker that covers global markets. This applies to most of the developed north, one of the signs of "distressed economies" is that you can use "stronger" currencies to transact locally.
Impact: For people in Nigeria earning USD, they will either open offshore accounts to receive their payments or just receive NGN in peace.
We are yet to see the Full bill and what impact it would have on our ability to invest in USD denominated assets. Another concern will be it's impact on diaspora bond payouts. An offshore account does make sense for stability.
What’s happening at the Money Wit Club…..
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