US Federal Reserve chair Jerome Powell (left) and Treasury Secretary Steven Mnuchin greet each other after testifying before the House Financial Services Committee in Washington on June 30. Powell signalled a more inflation-tolerant approach by the Fed during the most recent Jackson Hole policy summit. Photo: EPA US Federal Reserve chair Jerome Powell (left) and Treasury Secretary Steven Mnuchin greet each other after testifying before the House Financial Services Committee in Washington on June 30. Powell signalled a more inflation-tolerant approach by the Fed during the most recent Jackson Hole policy summit. Photo: EPA
US Federal Reserve chair Jerome Powell (left) and Treasury Secretary Steven Mnuchin greet each other after testifying before the House Financial Services Committee in Washington on June 30. Powell signalled a more inflation-tolerant approach by the Fed during the most recent Jackson Hole policy summit. Photo: EPA
Aidan Yao
Opinion

Opinion

Macroscope by Aidan Yao

Coronavirus recovery: Fed’s inflation shift could be good news for China

  • Changes to the central bank’s policy could dictate a very different Fed reaction to an improved economy compared to under the old rules
  • Generous stimulus that suppresses US interest rates could create abundant capital inflows that benefit China, removing the need to create its own liquidity

US Federal Reserve chair Jerome Powell (left) and Treasury Secretary Steven Mnuchin greet each other after testifying before the House Financial Services Committee in Washington on June 30. Powell signalled a more inflation-tolerant approach by the Fed during the most recent Jackson Hole policy summit. Photo: EPA US Federal Reserve chair Jerome Powell (left) and Treasury Secretary Steven Mnuchin greet each other after testifying before the House Financial Services Committee in Washington on June 30. Powell signalled a more inflation-tolerant approach by the Fed during the most recent Jackson Hole policy summit. Photo: EPA
US Federal Reserve chair Jerome Powell (left) and Treasury Secretary Steven Mnuchin greet each other after testifying before the House Financial Services Committee in Washington on June 30. Powell signalled a more inflation-tolerant approach by the Fed during the most recent Jackson Hole policy summit. Photo: EPA
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Aidan Yao

Aidan Yao

Aidan Yao is senior emerging Asia economist at AXA Investment Managers. Prior to joining AXA IM, he was a senior financial market analyst at the Hong Kong Monetary Authority for two years. He started his career at the Reserve Bank of New Zealand in 2007, serving as an economist and later senior financial market analyst until late 2011. He holds a master degree in finance (2006) and a bachelor degree in economics and finance (2005) from the University of Otago (NZ). He is also a chartered financial analyst.