The latest readings show that the consumer price index rose 0.5% last month from a year earlier in China, quickening from December’s 0.1% gain, data from the National Bureau of Statistics, above the 0.4% rise estimate of economists. Core inflation, excluding volatile prices for food and fuel, sped up to 0.6% in January from 0.4% the previous month.
To be honest, the Fed is in an awkward situation when they make any monetary policy at this time around. Its dual mandates which are full employment and price stability catch the Fed in the middle. After two years' big efforts, the Fed has made some progress in terms of fighting record high inflation which ever peaked in August 2022 by rate cuts.
U.S. has been sparing no effort to curb the AI development of China, including AI diffusion rules issued by President Biden to “regulate the global diffusion” of AI chips and models, which has been described to create a centrally planned global computing economy.
It seems there are some signs that Chinese government is adjusting its policy in terms of foreign investment amid geopolitical tensions and businesses’ calls for more concrete actions. On Feb. 19, authorities published a “2025 action plan for stabilizing foreign investment” to make it easier for foreign capital to invest in domestic telecommunication and biotechnology industries.
After disappointing job report being released, the narrative that a stagflation is coming in the U.S. has been prevailing among investing community. Contrary to what many believe, investment research firm BCA Research sees that the economy is on the brink of a stagflation, given the weak economic data, dismal consumer spending as well as slower job growth.
