Deputy Treasury Secretary Wally Adeyemo
- Says he is closely monitoring the Chinese economy
- US is probably best prepared to deal with the headwinds created by Chinese economic weakness
- Concerned about developing economies and those in Asia and Europe that are reliant on Chinese economy for growth
Right now, the bulk of my focus is on the Chinese economy and trying to figure out how bad it is. The problem is that the data is so opaque and unreliable and the anecdotes could be exaggerated. There's also an element of crowd-following as talk about China does the rounds.
But I'm certain the US Treasury has great data and plenty of people looking at China and on the ground, so I put plenty of weight on these comments. It takes a lot to weigh in on another country's economy.
His comments about countries reliant on China are also important and set up the trades that might work in the remainder of the year if China struggles. Also note the divergence between commodity exporting EMs (vulnerable) and commodity importers (could benefit).