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IPFS News Link • Economy - International

China's Credit Impulse Just Turned Negative, Unleashing Global Deflationary Shockwave

• Zero Hedge

While debate rages among Wall Street strategists and pundits whether the current burst of US inflation will prove to be merely transitory as the Fed and Biden admin want consumers to believe (despite UMich showing that 5-10 year consumer expectations for inflation had climbed a 10 year high of 3.1%), or, as even Goldman tentatively cautions, may lead to sustained higher prices over the long term, things in China are simpler: the credit tsunami unleashed in 2020 to offset the covid shutdowns is fading fast, local economic growth is fading fast and the deflationary shockwave triggered by China's shrinking credit impulse is about to sweep across the globe.

Overnight we had the latest China's economic data dump for the month of April, which included a large retail sales miss with a print of +17.7% yoy (vs. +25% yoy expected). There were also marginal misses for industrial output (at +9.8% yoy vs. +10% yoy expected) and YtD fixed investment (+19.9% yoy vs. +20% yoy expected).