China Danger Strikes Fear Into Global Investors Stumbling on Fed
- Top-level memo leaves out earlier vows to support the economy
- Investors are increasingly nervous over Xi’s Covid Zero policy
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The toxic combination of a slowing economy in China and what may be the most aggressive withdrawal of Federal Reserve stimulus since 1994 is hammering the world’s financial markets.
While everything from the Bank of England’s recession warning to poor U.S. productivity data contributed to the selloff this week, a shift in tone out of Beijing further undermined confidence. Top Chinese officials committed to Covid Zero in the strongest terms at a meeting on Thursday, while leaving out earlier pledges to minimize the economic cost of the strategy.