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China’s recovery may mean the Fed will have to hike rates longer



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SHANGHAI, CHINA – Tourists pose for a photo at the Shanghai Disney Resort as the resort kicked off a month of festivities from January 13 to February 10 to celebrate the upcoming Chinese New Year.China News Service | China News Service | Getty ImagesAs the end of China’s stringent Covid restrictions quickens the country’s economic recovery, concerns about pent-up Chinese demand — and the inflation that may follow — could mean bad news for the U.S. Federal Reserve.Economic data indicates that the Fed’s aggressive rate hikes are pulling down U.S. inflation, but China’s demand could make commodity prices return to levels from early 2022, before the U.S. central bank embarked on its journey of hiking rates to bring down inflationary pressures.related investing news 5 hours ago 9 hours ago”In our view … a stronger China increases the chances of a stubbornly hawkish Fed,” Tavis McCourt, institutional equity strategist at Raymond James, said in his 2023 Outlook.”With China, we do need more of everything – if that drives enough demand to get commodity prices back up closer to where they were in the spring of last …

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