China’s monetary policy is entering the red zone

The People’s Bank of China is engaging with European banks for strategies to manage low interest rates in light of deflation risks. Benchmark rates were reduced to 1.4% and 3%, but the economy remains sluggish, struggling with weak demand and declining prices.

Bond yields in China are declining, indicating increased caution from investors. The 30-year yield has fallen to 1.86%, reflecting a shift towards safer assets. Policymakers remain vigilant as signals of economic instability emerge.