Warning For Markets: There Is No Quantitative Easing...QT Re-Engaged!

China Macroeconomics & Academia

Christopher Balding

FX & Rates

<p>Chinese money markets have been surging across the yield curve even as the PBOC has been easing liquidity through increased open market operations.  This has significant implications for China across a range of economic and financial markets.</p><p>What makes this recent surge in Chinese interest rates is it tracks the expected increase in interest rates when the Federal reserve meets in December.  As we can see in Figure 1, since the beginning of October, short term Treasury yields in the US have…</p>

Chinese money markets have been surging across the yield curve even as the PBOC has been easing liquidity through increased open market operations.  This has significant implications for China across a range of economic and financial markets.What makes this recent surge in Chinese interest rates is it tracks the expected increase in interest rates when the Federal reserve meets in December.  As we can see in Figure 1, since the beginning of October, short term Treasury yields in the US have…

CNY

Chinese Interest Rates and the Fed