Will China’s Rate Cut Work Better Than the US or Japan’s?

Rick_PendergraftWhen China’s central bank cut interest rates on November 21 investors from Asia to the United States celebrated by driving stocks higher across all continents. While there had been talk of a rate cut for some time, the cut was held up by a policy disagreement.

The move comes as China’s economy has slowed dramatically from its torrid pace it was on during the first decade of this century. As a result, the Peoples Bank of China made the decision to cut rates in order to lower the borrowing costs for corporations in particular. Most experts believe there will be more cuts to come and the next one could come as early as the first quarter of 2015.

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