Fed's rate cut to have limited impact on China

The US Federal Reserve cut the interest rate by 0.25 percent on July 31 for the first time since the 2008 global financial crisis. The Fed said the rate cut is in light of the implications of the global economic outlook and muted inflation pressure. Fed Chairman Jerome Powell, on his part, said the rate cut is a mid-cycle adjustment to policy rather than the beginning of a series of rate cuts.

Compared with the large-scale interest cuts to cope with the 2008 global financial crisis, the rate cut this time is more like a "preventative" measure.

Many real economy indicators show the US' economic growth has been higher and faster than its potential growth rate. Last year, the United States' GDP grew 2.9 percent, while in the first half of 2019 its estimated growth rate was 2.6 percent, which was higher than the 2.5 percent potential growth rate based on US economic data since 1990.