In late 2015, a lifetime ago in financial markets, investors were in a sticky situation—the central banks of the world’s two biggest economies were moving in opposite directions.
Expectations of higher U.S. rates were sucking cash out of China, already struggling with a debt-deflation trap. Many feared the long-awaited China crisis had arrived. Instead, the Federal Reserve stood pat after just one rate rise —giving China a year’s reprieve to patch up leaky capital controls and stimulate nominal growth before the Fed resumed...