US equity bulls' relief at hearing Jerome Powell dispel fears about a 75 basis point rate hike has already been swept aside Thursday morning by the latest word from the Politburo Standing Committee, which reaffirmed its support for China's economically-devastating "COVID zero" policy.
According to Bloomberg, as the lockdown in Shanghai nears the start of week 6 (remember, the staggered lockdown was only supposed to last 9 days when it was initially imposed), China's top leadership affirmed that they will speed up measures to suppress regional COVID flareups using the same heavy-handed tactics that has led to some of the worst public dissent in China's recent history.
The Politburo insisted that the country has made progress in the fight against COVID. While COVID numbers have declined - case numbers in Shanghai fell for the 13th straight day yesterday - freedoms are returning at what, for many, seems like an excruciatingly slow pace.
Meanwhile, even White House adviser Anthony Fauci recently said China’s virus lockdowns will unlikely be successful in the long-term. The latest economic data have reflected contracting economic activity as restrictions put in place to contain the outbreak closed factories and snarled supply chains.
The COVID situation hasn't been uniform: While new cases in Shanghai fell slightly to 4,651 on Wednesday, infections in Beijing held steady at 50.
China's leadership pledged to continue supplying medicine and food to people suffering from the lockdowns (something that authorities have done a poor job of keeping up with, according to myriad reports), while also promising (or rather, threatening) to keep a lid on dissent.
The CCP will "resolutely fight against any speech that distort, question or reject" China’s COVID zero strategy, according to the meeting.