A world away from Wall Street, a pork crisis has been going on in China.
And this morning, the proverbial farm animal came home to roost: The May CPI number was a staggering 5.6% more than a year ago, exceeding analyst expectation of 4.8%.
Inflation rises sharply in China
Prices of pork and other meat surged 45.2 percent and that of eggs 30.6 percent, the National Bureau of Statistics reported.
Chinese leaders are worried that a boom that saw the economy grow 11.9 percent in the latest quarter might ignite inflation. They have tried to cool the boom by raising interest rates three times in the past six months, and economists expect one to two more increases this year.
But at the bottom of every pork barrel must be …something for politicians. With the odds of future rate hikes receding in the U.S., further tightening by the PBoC might be just the thing needed to strengthen the Yuan relative to the Dollar.