China’s central bank has better stimulus options than the Fed

The firepower of central banks is under intense scrutiny as countries look for ways to claw themselves out of recession induced by coronavirus The firepower of central banks is under intense scrutiny as countries look for ways to claw themselves out of recession induced by coronavirus © FT montage; Bloomberg

Western depictions of the relative performance of the US Federal Reserve and the People’s Bank of China invariably present the former as sophisticated and proactive, while the latter is portrayed as reactive and bureaucratic. If you take a moment to examine these preconceptions, you can see how wrong they are.