PBOC Takes Lead in Taper, to Ease Relative to Fed Later
(Bloomberg) -- The Federal Reserve’s interest rate liftoff is unlikely to affect the People’s Bank of China’s policy calculus much, according to Bloomberg Economics. China has already shifted to a tightening bias and is draining liquidity to temper credit growth, in contrast to a Fed still on hold. While China is leading the tapering now, its monetary policy could ease relative to the U.S. once the Fed starts to hike, said Asia Chief Economist Chang Shu. Bloomberg Economics sees the PBOC staying on rate hold through 2024 and the Fed to start hiking from late 2023.
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