Fed, PBOC Look Set to Diverge on Monetary Policy in 2022

(Bloomberg) -- Monetary policy in the U.S. and China looks set to deviate in 2022, with the Federal Reserve poised to tighten and the People’s Bank of China likely to ease. The divergence is likely to occur in both interest rates and liquidity, according to research by Bloomberg Economics. The upshot -- the yield spread of Chinese government bonds over U.S. Treasuries will probably narrow.

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