The Fed hints that it will reduce interest rates in the future, and China will keep its benchmark lending rate stable | Real Time Headlines

China kept its main benchmark lending rate unchanged on Friday as Beijing faces the challenge of boosting economic growth while supporting a weakening yuan.

The People’s Bank of China said it would stabilize The quoted interest rate for one-year loans is 3.1%, and the quoted interest rate for five-year loans is 3.6%. The 1-year LPR affects corporate and most home loans, while the 5-year LPR serves as a reference for home loan interest rates. A Reuters poll of 27 economists showed the move was expected.

The rate decision was based on consensus expectations of 25 basis points cut interest rates Depend on Fed Wednesday. The Federal Reserve also said it would cut interest rates only twice in 2025, fewer than the four rate cuts predicted at its September meeting.

analyst explain The Fed’s revised outlook for future interest rate cuts is unlikely to have a huge impact on the Chinese central bank’s easing policy trajectory, although it could put pressure on the yuan.

Earlier this month, senior Chinese officials pledged top economic agenda setting meeting Step up monetary easing measures, including interest rate cuts, to boost the struggling economy.

The central bank retains the one-year and five-year LPR constant November, following A 25 basis point rate cut in October is widely expected. central bank surprised the market Key short-term and long-term loan rates were cut in July.

Forecasts from major investment banks and research firms The yuan will depreciate further Next year, President-elect Trump is expected to follow through on his tariff threats.

Despite a series of stimulus measures since the end of September, China’s latest economic data shows that the country is still dealing with entrenched deflation amid tepid consumer demand and a prolonged slump in the real estate market.

Wang Yan, chief emerging markets and China strategist at Alpine Macro, told CNBC that the Fed’s future easing cycle will “create some space for the Chinese central bank to follow up.”Asian road sign” on Thursday, while emphasizing that fiscal easing will play a more critical role in promoting China’s economy next year.

Wang Yi said in a note to CNBC on Friday that he believes China’s central bank should continue to cut interest rates to ease the yuan’s deflation against other currencies.

“At the same time, the Chinese government has greater fiscal flexibility and may rely more on fiscal measures to stimulate growth,” he added.

—CNBC’s Dylan Butts contributed to this report.