The world economy watches closely as major central banks act and political moves sway markets. China remains cautious on policy, the U.S. reshapes its tech landscape through a TikTok deal, and Australia shows progress in taming inflation—highlighting the delicate balance between growth, stability, and external challenges.
China Holds Lending Rates Steady for Fourth Straight Month
The People’s Bank of China kept its key lending rates unchanged for a fourth consecutive month, despite last week’s Federal Reserve rate cut.
The one-year loan prime rate remained at 3%, and the five-year rate—key for mortgages—stayed at 3.5%, matching market expectations.
Authorities prefer to wait before introducing major stimulus measures, especially after a notable stock market rally, even as recent data reveal soft domestic demand.
China last cut rates in May, lowering them by 10 basis points to support economic activity. The central bank also kept its seven-day reverse repo rate unchanged last week, underscoring a cautious policy stance amid domestic challenges and global volatility.
Trump Announces Prominent Investors for U.S. TikTok Deal
U.S. President Donald Trump said a group of leading American business figures—including media executive Lachlan Murdoch, Oracle founder Larry Ellison, and Dell Technologies chairman Michael Dell—will participate in the proposed deal to keep TikTok operating in the United States.
Trump noted that Washington and Beijing have made progress in negotiations over transferring TikTok’s U.S. assets to address national security concerns.
He emphasized that the involvement of these investors will give his corporate allies direct influence over the hugely popular app, used by roughly 170 million Americans and influential in shaping political and cultural discussions.
Reserve Bank of Australia Governor: Inflation Under Control, Labor Market Strong
Reserve Bank of Australia (RBA) Governor Michele Bullock delivered key remarks to Parliament on labor conditions, inflation, and monetary policy, stressing that future moves will remain data-driven.
- Labor Market: Bullock said employment remains close to full capacity despite slight cooling, with only a modest rise in unemployment and slower job growth. Demand for labor remains strong.
- Inflation: She highlighted significant progress in lowering inflation and expressed growing confidence it will stay within target, while cautioning that strong demand or wage increases could reignite price pressures.
- Policy Approach: Bullock reiterated that the RBA relies primarily on quarterly consumer price data for policy decisions, noting monthly figures are not comprehensive enough.
Recent rate cuts are expected to support household spending and business investment, with early signs of a rebound in private consumption as real incomes improve. However, she warned that slower global or domestic growth—especially a downturn in China—could weigh on Australia’s economy given the close trade ties.
Bullock’s comments suggest the RBA is unlikely to cut rates further in the near term, given the resilient labor market and steady progress on inflation. The bank will continue to monitor both domestic and international developments before taking any new steps.
These developments illustrate how major economies are navigating a fine balance between controlling inflation, fostering growth, and managing geopolitical tensions. While China maintains a cautious monetary stance, the United States moves strategically to safeguard its tech interests, and Australia relies on careful data monitoring to maintain stability. Global markets remain on alert as they watch for the next round of policy and economic signals.