The coming collapse of Chinese construction and Fed rate cuts vs the stock bubble

The good news is our China team has solved a mystery about Chinese property construction: why has it held up so well, even as sales and starts have collapsed? The bad news is that their conclusions point to a painful adjustment with massive implications for China’s growth and policy outlook. 

 

With Neil Shearing out this week, Chief Asia Economist Mark Williams is on The Weekly Briefing from Capital Economics to tell David Wilder why China faces a wrenching economic future – and why officials at the National People’s Congress seemed so unfazed about the growth challenges. 

Plus, speculation about Fed rate cuts took hold in Q4 last year and equities prices surged. Then policymakers pushed back on those expectations coming into 2024 – and prices still surged. As a bubble forms in the market, Markets Economist James Reilly explains what’s driving stocks as hopes for policy easing ebb and flow, how stocks could respond when the Fed finally does cut rates, and what a Trump re-election could mean for the market.

Click here to explore the analysis and events referenced in this episode.