In a surprise move, China's central bank reduced its benchmark interest rates by 0.25%. Rates for 12-month loans fell to 6.31% while deposit rates dropped to 3.25%. If the growth outlook in emerging markets is so rosy as analysts forecast, why the stimulus?
China is battling sluggish economic growth and a housing bubble that its leaders deny exists.
Over the past 11 years, the investment in residential housing as a percentage of China's GDP has tripled. That puts China right on par with a similar peak to the U.S. housing bust.
The academics who promote the false idea of economic decoupling live in a fairyland world.
What can we expect from China going forward? More lackluster growth and more rate cuts. Bank on it.
Get Breaking News and Free ETF Trading Alerts: TEXT 22828 / KEYWORD: ETFguide
More From ETFguide.com