Beijing plays down Fed rate hike prospects after Yellen comments
China is not fully convinced about intensive US Federal Reserve rate rises in 2017 and beyond, a Chinese foreign exchange regulation official said yesterday, hours after Fed chairwoman Janet Yellen said rates were expected to be raised “a few times a year”.
At a media briefing in Beijing, the State Administration of Foreign Exchange spokeswoman Wang Chunying said doubts remained about policy implementation by the incoming Trump administration.
“The process of US Fed rate rises as well as the strengthening of the US dollar needs more observation,” Wang said. “As everyone remembers, the Fed was widely expected to raise rates three or four times in 2016 after the rate increase at the end of 2015, but it only raised it once.”
The comments came hours after Yellen told the Commonwealth Club in San Francisco that the Fed was on course to raise the rate so that “by the end of 2019, it is close to our estimate of its longer-run neutral rate of 3 per cent”.
Wang said that impacts of US rate rises on China were waning.
“China’s economic growth, and financial and social stability provide advantages to offset the impact of Fed rate rises,” he said.
