China currency drop: Any impact on U.S. economy?

from San Diego Union Tribune’s EconoMeter panel.

Q: Does China’s currency devaluation signal worsening times for its economy with some impact on the U.S.?

Bob’s Answer: YES

The reduction in value of the yuan vs. the dollar was the biggest amount in over 20 years. Worries about China’s economy will certainly have some ripple effects on the U.S. economy. China’s purchases of U.S. products will likely decline. This could have an impact on the September Fed meeting where most of us were expecting an interest rate bump, albeit a modest one. That may still occur but it will be with even more caution than thought previously.

Read more answers here.


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