The U.S. interest rate hike will help curb inflation in the U.S., while drawing investment away from China. This will in turn drive down the yuan and increase the cost of foreign debt payments for the Chinese Communist Party (CCP) and Chinese corporations.
In order to combat inflation, already at 8.5% in the U.S., the Federal Reserve Board raised interests rates by .5 percentage points on May 4, 2022. The Fed had already raised the primary credit interest rate by .25 percentage points in mid-March, the first increase since 2000. Fed Chairman Jerome Powell said in a May 4 press conference that there may be multiple rate hikes of fifty basis points over the coming months….
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