China raises rates, India spells out why its necessary

China raised both its lending and deposit rates by 25 bps to 6.31% and 3.25% respectively. The 3.25% though compares with the Feb y/o/y CPI of 4.9%, thus the PBOC is far from tight in their policy. China is continuing the fight that many other nations have taken to attack inflation pressures that do great damage to an economy. The terms of the battle were well put by the deputy Gov of the Reserve Bank of India, who will raise rates again in May and said “Rising interest rates are making your projects little less attractive, making you little less inclined to invest, but the alternative to that will be a meltdown. So, a little bit of pain now, a little bit of medicine now, with the prospect of less suffering in the future is the way to look at it.” Bernanke said nothing market moving last night as while he’s watching inflation “extremely closely,” he still thinks the rise in commodity prices is “transitory.” Bottom line, some central bankers are acting preemptively while others are hoping with fingers crossed.

Category: MacroNotes

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

3 Responses to “China raises rates, India spells out why its necessary”

  1. CTB says:

    Ugh. China doesn’t have 20% unemployment.

  2. constantnormal says:

    “China doesn’t have 20% unemployment.”

    How do you know that? It’s a big country, without any sort of credible economic statistics. How does anyone know how many people are actually “employed” in China? This is a nation who releases their economic stats within days of the end of the quarter … do you really believe that they are THAT organized, or are they simply making the numbers up?

  3. klhoughton says:

    China has 4% unemployment no matter what. Everyone knows that.

    If the “developing” countries (e.g., India) are expecting a meltdown if they don’t reduce production, doesn’t that imply that Bernanke is (currently) doing the right thing in not trying to stop imaginary (domestic, non-core) inflation because the rest of the world is correctly telling him that they don’t believe the U.S. has recovered enough to absorb their excess production?

China raises rates, India spells out why its necessary

China raised both its lending and deposit rates by 25 bps to 6.31% and 3.25% respectively. The 3.25% though compares with the Feb y/o/y CPI of 4.9%, thus the PBOC is far from tight in their policy. China is continuing the fight that many other nations have taken to attack inflation pressures that do great damage to an economy. The terms of the battle were well put by the deputy Gov of the Reserve Bank of India, who will raise rates again in May and said “Rising interest rates are making your projects little less attractive, making you little less inclined to invest, but the alternative to that will be a meltdown. So, a little bit of pain now, a little bit of medicine now, with the prospect of less suffering in the future is the way to look at it.” Bernanke said nothing market moving last night as while he’s watching inflation “extremely closely,” he still thinks the rise in commodity prices is “transitory.” Bottom line, some central bankers are acting preemptively while others are hoping with fingers crossed.

Category: MacroNotes

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

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