Commentary
Inflation has forced Western central banks to raise interest rates, but in Asia, China has taken the opposite tack.
All the central bankers—East and West—worry over a recession. Still, the lessons of the last great inflation of the 1970s and 1980s have convinced the Federal Reserve (Fed), the European Central Bank (ECB), and other Western bankers that they have little choice but to move toward monetary restraint.
China, however, faces a very different set of pressures. Confronted by much less intense inflationary pressure than the West and highly concerned about the nation’s poor economic prospects, the People’s Bank of China (PBOC) has cut interest rates, albeit only marginally, and otherwise eased monetary policy….