Reported 4 months ago
China is intensifying its efforts to curb a bond frenzy by hinting at potential central bank intervention in the government bond market to prevent further speculative activities and potential market instability. While the bond rally has helped lower borrowing costs and support growth, concerns over a bond bubble pose risks to financial markets and the economic recovery. The People's Bank of China may sell bonds to cool demand, as investors flock to fixed-income securities amid pessimism about long-term growth and expectations of further stimulus, despite the central bank's reluctance for interest rate cuts. Speculation surrounds the possibility of quantitative easing and the need to address hidden risks, while retail investors drive volatility with speculative activities in the bond market.
Source: YAHOO