Monday, August 13, 2007
Chinese inflation soared to a 10-year high of 5.6% in July, led by a sharp increase in food prices.
A little reminder about why bankers will find it difficult to cut rates in response to recent volitility this time. This inflation WILL be exported, particularly when interest rates have to rise and the Yuan begins to appreciate and loose its dollar peg. We import too much from China to not be effected.