The latest US inflation print may have increased doubts that South Africa can escape most of the inflationary pressures observed in the US. For one, it seems as if the FRA market believes South Africa will not be able to escape these pressures. The FRA market is currently pricing in 250 bps of hikes over the next two years, which, in our view, is consistent with inflation expectations closer to 6% by the end of next year. These inflationary pressures may arrive for South Africa, but our estimates suggest the US is unlikely to be the major source of such inflationary pressures.