Fed Keeps Rates on Hold; Canada to Recognize Palestine | Horizons Middle East & Africa 07/31/2025

Monetary Policy & Interest Rates - The Federal Reserve (FED) maintained unchanged interest rates, citing inflation risks, but two governors dissented, favoring a rate cut [1][46] - Markets priced out the possibility of a September rate cut, reducing expectations from 45 basis points to around 30 basis points for rate cuts by year-end, interpreting the FED as hawkish [2] - The Bank of Japan (BOJ) held benchmark interest rates but raised its inflation outlook, hinting at a potential rate hike in the coming months, possibly in October [51][52][58] Trade & Tariffs - President Trump imposed a 15% tariff on South Korean exports, with Seoul agreeing to invest $350 billion in the U S and buy $150 billion in energy products [1][9] - India faces a 25% tariff rate, potentially higher due to Russian energy purchases, which is perceived as a less favorable deal compared to South Korea's 15% [1][14][50] - Trade deals involve countries committing to invest in the U S and purchase energy products, with a common tariff rate around 15% to 20% [11][25] Company Earnings & Performance - Standard Chartered reported a second-quarter beat with $24 billion versus estimates of $19 billion, announcing a $13 billion buyback and projecting growth in the 52% to 7% range [6][7][8] - Meta and Microsoft posted strong earnings, with Meta projecting increased capital expenditures for AI investments and Microsoft reporting Azure cloud growth of 39% and $25 billion in Azure revenue [26][31][34] - Samsung's quarterly profit fell short of expectations due to export controls on high-bandwidth memory chips [36] Geopolitical & Regional Developments - Canada is planning to recognize a Palestinian state at the United Nations summit in September, a move rejected by Israel [1][37] - Bain is winding down its consulting operations in South Africa due to accusations of corrupt and fraudulent practices related to a contract with the country's tax agency [69][70][71] - Ghana lowered its interest rate to 25% from 28% after a significant slowdown in inflation [76]