The headline can be rewritten as: The Fed rate cut precedes a press conference by China's central bank chief.

• On Tuesday, Gov. Pan Gongsheng of People's Bank of China will speak alongside two other financial regulator heads to the press.
• After the U.S. Federal Reserve cut interest rates last week, a relatively rare high-level press conference was scheduled.
• The PBOC manages monetary policy by utilizing a range of interest rates, rather than solely concentrating on a single main rate, like the Fed.

On Tuesday, Gov. Pan Gongsheng of the People's Bank of China will speak alongside two other financial regulator heads.

An uncommon high-level press conference was scheduled following the U.S. Federal Reserve's reduction of interest rates last week. This initiated an easing cycle, allowing China's central bank to potentially decrease its rates and stimulate growth amidst deflationary pressures.

In July 2023, Pan was appointed as the governor of the People's Bank of China (PBOC). During his first press conference as central bank governor in January, he announced that the PBOC would reduce the reserve requirement ratio (RRR) for banks, a policy decision that is typically made through online releases and state media.

In March, during China's annual parliamentary meeting, he told reporters that there was space to decrease the RRR even further. It is widely anticipated that such a reduction will occur in the near future.

The PBOC manages monetary policy by using a range of interest rates, rather than focusing solely on a main rate like the Fed. On Friday, the PBOC did not alter its loan prime rate, which influences corporate and household loans, including mortgages.

The Chinese government's policy-setting is done at a higher level than that of financial regulators, as seen in meetings held in July to achieve full-year growth targets and increase domestic demand.

The PBOC has lowered the 14-day reverse repo rate by 10 basis points to 1.85%, but not the 7-day rate, which was cut in July to 1.7%. Pan has stated that he wants the 7-day rate to be the main policy rate.

The slowing of China's economic growth is being attributed to the real estate market downturn and low consumer confidence. Economists are urging for increased stimulus, particularly on the fiscal front.

Goldman Sachs' Chief China Economist Hui Shan and her team stated in a Sept. 22 note that the easing of policies, including monetary, fiscal, and housing policies, has been slow and incremental over the past year. This has allowed negative feedback loops to develop in the economy.

The analysis showed that local government bond issuance is increasingly being used to address budget deficits rather than funding growth initiatives.

Other high-level regulators to speak

Li Yunze, minister of the National Financial Regulatory Administration, and Wu Qing, chairman of the China Securities Regulatory Commission, are also scheduled to speak at Tuesday's press conference.

Last year, the National Financial Regulatory Administration was established in Beijing as part of its financial regulatory system overhaul. It replaced the banking and insurance regulator and assumed responsibility for overseeing investor protections and financial holding companies. Previously, these responsibilities were under the purview of the securities regulator and central bank, respectively.

In early February, Wu was named head of the Securities Regulatory Commission, having previously held the position of head of the Shanghai Stock Exchange during a stock market downturn.