Wall Street Banks Predict Biggest China Rate Cuts in Decade
- Borrowing cost seen easing to counter US tariffs, weak demand
- But analysts see PBOC short of rates ammo, fiscal steps needed
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China’s central bank will deliver the biggest interest-rate cuts in a decade next year as policymakers intensify efforts to shore up growth and arrest deflation, in the view of a number of Wall Street lenders.
Goldman Sachs Group Inc. and Morgan Stanley are among those projecting cuts of 40 basis points to the People’s Bank of China’s main policy rate in 2025. That would be the largest reduction in a calendar year since 2015, taking the seven-day reverse repo rate down to 1.1%. The median forecast in Bloomberg’s most recent survey was for 30 basis points of cuts.