China’s Latest Economic Shutdown Could Impact US Interest Rates

China's Latest Economic Shutdown Could Impact US Interest Rates

(USNewsMag.com) – China recently made the decision to lock down multiple cities to fight the COVID-19 pandemic. One of the cities now under strict rules is Shenzhen, a major manufacturing and tech region bordering Hong Kong. A new report reveals what happens in the communist country could have a big impact on the US.

According to Breitbart, the Chinese government shocked the world when it put Shenzhen under lockdown. The Nasdaq Composite reacted violently to the news, dropping over 262 points. Amazon declined 2.5%, Apple dipped 2.7% and Google also fell 3%. Both the Dow Jones and S&P were relatively fine. The concern is the lockdown could last for weeks which would make US inflation, already at 7.9%, higher by adding to shortages of food and other goods.

The Federal Reserve is meeting this week and is expected to raise interest rates to try to slow the US economy a bit to get it back on track. With China’s lockdowns, the Fed could decide to raise the interest rates more than the 25 basis points it was reportedly planning.

Although the US has its own economy, it’s also part of the global economy. When one country is having problems, it can impact them all. It’s yet another example of why America shouldn’t rely so heavily on foreign manufacturing.

Do you think the Fed is going to take aggressive actions to keep inflation from increasing?

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