Comment: If the Fed actively cuts interest rates to the Peoples Bank of China, t

Source: Bloomberg

The People's Bank of China is expected to obtain an asthma that has been expected from the global financial market dynamics. Investors and traders have waited for a long -awaited currency stimulus policy may gradually approach.

The Bank of China unexpectedly reducing interest rates two weeks ago may be just the beginning. Some economists now expect a total of three interest rate cuts in 2024, which will be a loose scale that has not been seen for many years.With concerns about economic recession, a potential disruptive factor is that the Fed may adopt a more active interest rate cut.

Xu Yongbin, co -investment director of Youshan Fund, said that, given that the trader expects that the Federal Reserve will have more interest rate cuts, the Central Bank of China is more room for interest rate cuts now; it is expected that the People's Bank of China will have at least one or two times this year.Monthly cut interest rates.

Chinese decision makers have carried out the RMB exchange rate defense war of the year and below, maintaining domestic interest rates unchanged, waiting for the Federal Reserve to reduce the lending cost from a 20 -year high.If China and the United States have expanded, it may exacerbate the capital outflow situation and lower the currency exchange rate.

But U.S. Treasury bonds have risen sharply, lowered the US yield and reduced the pressure on the renminbi.The interest rate futures show that traders are now expected to cut interest rates at least a percentage point by the Fed by the end of the year, starting from September or earlier.

For China, this means that the central bank has less worries, and the opportunity to boost the economy is in front of it.

Since the end of last year, the RMB has faced the pressure of depreciation, which stems from the pessimistic mood of China's growth prospects, and the gap between the yield of US Treasury bonds and the yield of China Treasury bonds has expanded.

However, the difference between the return rate of 10 -year Treasury bonds in the United States and China this week has narrowed to its lowest level since February, which has weakened the attractiveness of US Treasury bonds relative to Chinese Treasury bonds.

Therefore, some analysts and investors predict that the People's Bank of China may take action within a few weeks.The Fed is expected to cut interest rates two to three times this year, and Macgench Group is expected to cut interest rates at least twice this year, which will be twice as expected before this year.

After a round of loose policy in late July, the market forecast has changed. Now this kind of pigeon theory has further raised.Policy adjustment also implies that steering depends on the central bank's short -term interest rate as the main policy leverage to guide the market.

Economists who were investigated by Bloomberg at the end of July predicted that the 7 -day interest rate and one -year policy loan interest rate of the People's Bank of China would remain unchanged by the end of this year.Only a slightly slightly more than half expects that the central bank will regulate the benchmark loan interest rate in the fourth quarter.

Time is important to China, because further interest rate cuts help reduce the debt burden of individuals and enterprises, thereby stimulating investment and expenditure.

Even so, under the situation where the property market continues to be sluggish and the employment market is dim, the central bank's mild interest rate cut in recent years has not boosted the confidence of the borrower.On the contrary, these measures seem to show that the official is increasing support for the economy.

Fiscal stimulus and assistance to the real estate department will more effectively revitalize demand, but the government has been reluctant to adopt such options on a large scale.

Of course, in addition to the exchange rate factors, the People's Bank of China has to respond to other factors.The profit margin of commercial banks is extremely narrow, and the role of previous interest rate cuts has limited effects on boosting demand.

In recent years, the People's Bank of China has paid more and more attention to the domestic situation when formulating policies.This means that the current choice will eventually depend on China's own economic needs, rather than follow the Fed's interest rate action.

According to Ding Shuang, the chief economist of China and North Asia, there is a situation that is unlikely to happen, that is, the hard landing of the United States has triggered a global economic recession.Large pressure will actually reduce the policy space of the People's Bank of China.

Ding Shuang maintains his expectations in late July, that is, the 7 -day reverse repurchase interest rate of the 7 -day reverse repurchase in the fourth quarter of this year and the first quarter of 2025, respectively.The one -year policy loan interest rate, that is, the so -called medium -term loan convenience (MLF) interest rate, may be doubled at a rate of each time.

"If the real estate industry has a background rebound next year, Chinese domestic demand may stabilize," Ding Shuang said. "In addition to the soft landing of the United States, then you don't need to follow the US interest rates to reduce interest rates."