China raised rates by a quarter percent. The move made headline news, currencies jumped, stocks tanked. Do we have yet another freak out over nothing? Or is it more China holds the globe's economy by the short hairs?
Firstly, the interest rate was about their housing market, which is overheated and to curb inflation, which has risen the most in 2 years.
China’s central bank unexpectedly announced Tuesday that it would raise interest rates for the first time in nearly three years, apparently in the hopes of dampening inflation and cooling off this country’s hot property market.
MarketWatch is reporting the dollar jumped 1.4% against a basket of currencies.
The U.S. dollar jumped 1.4% against a basket of currencies on Tuesday as a rate hike by China fueled worries that the world’s fastest growing economy was trying to slow down
The sudden interest rate increase happened at the same time The World Bank issued a new report, East Asia Pacific Update and China's GDP and CPI numbers are due out this week. The World Bank expects China's GDP to be 9.5% this year.
Recent comments