The circular design of the People’s Bank of China headquarters in Beijing is an apt metaphor for the logic surrounding central banking in 2021.
Much of the drama involves the Federal Reserve. Namely, what peers around the globe can learn from Chairman Jerome Powell’s handiwork in Washington. Since February 2018, when then-President Donald Trump gave him the top Fed job, Powell supersized the balance sheet of the top monetary power.
And Powell’s team still has the liquidity spigot set on “overdrive.”
The PBoC is going the other way – taking steps to yank away the proverbial punchbowl. And in the process, perhaps offering the globe a better example than its Fed counterparts.