China Didn’t Pull The Trigger: Here’s Why

China Didn’t Pull The Trigger: Here’s Why

Yesterday, we suggested that the most important question wasn't whether the Fed would put a dovish spin on the June hike, but rather whether China would follow up with their own hike hours later. The risk, you're reminded, is that if China doesn't effectively "call" the Fed (like they did in March), then rate differentials compress, sparking a weaker yuan and capital flight. Seen in that light, the move to add a counter-cyclical adjustment factor to the yuan fix last month (and the attendant s
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One thought on “China Didn’t Pull The Trigger: Here’s Why

  1. So, do you think they’ll be able to keep this going without an injection? I have to believe we’re going to see some significant credit problems begin to manifest over the next 6-12 mos.

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