US Federal Reserve chairman Jay Powell said the US is on track to reach its 2 per cent inflation target when the 10-year US Treasury bond is yielding 0.78 per cent, meaning the inflation-adjusted US interest rate is negative. Photo: AFP US Federal Reserve chairman Jay Powell said the US is on track to reach its 2 per cent inflation target when the 10-year US Treasury bond is yielding 0.78 per cent, meaning the inflation-adjusted US interest rate is negative. Photo: AFP
US Federal Reserve chairman Jay Powell said the US is on track to reach its 2 per cent inflation target when the 10-year US Treasury bond is yielding 0.78 per cent, meaning the inflation-adjusted US interest rate is negative. Photo: AFP
Zhou Xin
Opinion

Opinion

Zhou Xin

China’s yuan rally has just started, and it is thanks to the US Federal Reserve

  • China’s 10-year government bond offers a yield of 3.2 per cent against an August consumer price index of 2.4 per cent, resulting in a positive real yield
  • In contrast, the US is on track to reach its 2 per cent inflation target when the 10-year US Treasury bond is yielding 0.78 per cent, meaning the interest rate is negative

US Federal Reserve chairman Jay Powell said the US is on track to reach its 2 per cent inflation target when the 10-year US Treasury bond is yielding 0.78 per cent, meaning the inflation-adjusted US interest rate is negative. Photo: AFP US Federal Reserve chairman Jay Powell said the US is on track to reach its 2 per cent inflation target when the 10-year US Treasury bond is yielding 0.78 per cent, meaning the inflation-adjusted US interest rate is negative. Photo: AFP
US Federal Reserve chairman Jay Powell said the US is on track to reach its 2 per cent inflation target when the 10-year US Treasury bond is yielding 0.78 per cent, meaning the inflation-adjusted US interest rate is negative. Photo: AFP
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