Taken from today’s MSNBC article: http://www.msnbc.msn.com/id/23914208/ ----------- Washington’s interest rate cuts have complicated Beijing’s effort to cool its fast-growing economy by raising its own rates. Economists say that if the gap between rates in the two countries grows too large, it could draw foreign money into China, fueling inflation that is heading toward 12-year highs. ----------- So how does a growing US-China interest rate gap help fuel U.S.'s inflation?
I think the 12-year high they are talking about is China’s inflation rate, not the US
You’re right about that. Is the point here that China is raising its rates to cool inflation, but US cutting rates is countering China’s efforts?