Opinion | Central banks offer some comfort as trade war takes toll
- Chinese and American negotiators may be at loggerheads, but those in charge of monetary policy in both countries are moving in a similar direction and providing reassurance to the world
Chinese and American trade warriors may be at loggerheads, but those in charge of monetary policy in both countries are moving in a similar direction.
After the turmoil in the global capital markets of last month, things may be looking up at the start of the new year for both sides and the world economy.
Fears about a recession in the United States and a destructive slowdown in China may be premature, but policymakers in both countries are worried.
US Federal Reserve chairman Jerome Powell sent a reassuring message last week by saying the US central bank would be patient in approving any further rate increases as it gauged whether the US economy would slow down or power ahead this year.
This followed another dovish statement he made just days before that the Fed would exercise “flexibility and patience” in evaluating data. The latest change of tone is significant in contrast to expectations of steady rate rises in recent messages amplified by Fed officials.
Meanwhile, the People’s Bank of China launched the first round of policy easing for the new year by slashing the required reserve ratio by a full percentage point.
