Central Banks
Fed Moving Aggressively on Rate Cuts May Spur PBOC to Ease More
- Some traders, investors see more room for China to ease policy
- Treasury rally takes heat off yuan, opens rate space for China
This week the difference between US and Chinese 10-year government bond yields narrowed to the smallest since February.
Photographer: Bloomberg
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The People’s Bank of China is potentially getting the respite it’s been hoping for from global financial markets, bringing closer a dose of monetary stimulus long awaited by investors and traders.
An unexpected move by China’s central bank two weeks ago to lower interest rates may have been just the start of what some economists now say could be a series of three cuts in total in 2024 — easing on a scale unseen in years. A potential gamechanger is what’s likely a more aggressive path of rate decreases by the US Federal Reserve as fear of recession stalks the markets.