Everyone’s Worrying About China, But the Real Pain Is Coming From the Fed

For all the worries about the potential global spillovers from China’s economic troubles, it’s actually the US Federal Reserve that’s inflicting pain on much of the world at the moment.

The reason: Although financial markets had been pricing in rate cuts for the latter part of 2023, it’s become clear that US interest rates are likely to stay high as the threat of a recession recedes but US inflation continues to show signs of stickiness.