Is China in Lock-Step With the Fed? Keep Watch Next Week
- ING, UBS say China won’t follow Fed, while StanChart disagrees
- China has bolstered yuan, deleveraging drive since March move
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With a Federal Reserve interest-rate hike next week all but a done deal, the burden of anticipation is shifting to a less predictable central bank 7,000 miles away: China’s.
When the Fed last hiked, in March, the People’s Bank of China followed suit hours later, boosting borrowing costs in what was seen as a bid to support the yuan by preserving the rate advantage over the U.S. Viewed at the time as a sign the two central banks were moving in step, much has changed over the past three months.