China raises interest rates

China finally took more overt action to apply the breaks to its overheated economy this week. Yesterday they announced an interest rate hike, which, though moderate, should have positive effects on the global economy. The country had not increased rates since 1995, despite being outspoken about a desire to slow down the seemingly unsustainable pace of growth. Inflation fears induced the change, which should make it less attractive (albeit, by a very small .25%) to invest in China relative to other areas of the globe. In the long-term, Americans importing goods from China may see higher prices, as manufacturers find it more difficult and expensive to secure the credit they need to maintain and increase production levels. However, if the rate serves to control inflation and bring the economy to a "soft landing" at a more sustainable growth rate, this development should be a net-positive.