By Omkar Godbole: The latest news from the Chinese bond market shows that the one-year government bond yield has dropped below 1% for the first time since the Great Financial Crisis, adding to the year-to-date downturn. This development suggests that China’s economic troubles are far from over, and the government may need to roll out more aggressive stimulus measures than previously anticipated.
Additionally, the continued decline in yields raises questions about Federal Reserve Chairman Jerome Powell’s recent concerns over inflation, as it could cap price increases worldwide. This bodes well for risk assets like bitcoin, which have faced selling pressure recently due to fears of higher interest rates.
However, the situation in China also highlights the need for caution, as market sentiment can quickly shift.
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