The leading factor in the current round of narrowing the interest rate gap between China and the United States lies in the "surge" of US bond interest rates. At present, RMB assets have security, profitability and liquidity. Even if the interest rate gap between China and the United States is narrowed, it will not fundamentally reverse the risk aversion and investment attributes of RMB assets, and the prospect of RMB assets is still good. Affected by factors such as the expectation of the Federal Reserve to raise interest rates, the interest rate spread between China and the United States has narrowed rapidly recently. At present, the 10-year Treasury bond interest rate difference between China and the United States is about 30 basis points, which has narrowed by nearly 50 basis points since March and more than 90 basis points since the beginning of the year. The interest rate gap between China and the United States has been compressed to an all-time low, which has led to market concerns about China's capital outflow and the depreciation of the RMB exchange rate. It should be noted that the narrowing of the debt interest margin between China and the United States is inevitable, mainly due to the dislocation of the economic cycles and the asynchronous monetary policies of the two countries. China's economic development is facing the triple pressure of shrinking demand, supply shock and weakening expectation. It is necessary to maintain a prudent monetary policy that is flexible and appropriate and maintain reasonable and sufficient liquidity; US inflation hit a 40 year high in February, and monetary policy needs to be tightened to curb severe inflation. The leading factor in the current round of narrowing the interest rate gap between China and the United States lies in the "surge" of US bond interest rates. After the interest rate meeting in March 2022, more and more Fed officials turned to "Eagle", especially after Fed chairman Powell made it clear that "it is necessary to increase the interest rate to more than 25bp at one or more meetings", the US bond interest rate has ushered in a wave of surge. Whether the narrowing of the interest rate gap between China and the United States means that the pressure of capital outflow increases needs to be analyzed in detail. In fact, the factors affecting cross-border capital flows include not only interest rate spread, but also economic growth expectation, asset security and exchange rate stability. At present, in the complex international environment, RMB assets have security, profitability and liquidity. Even if the interest rate gap between China and the United States is narrowed, it will not fundamentally reverse the risk aversion and investment attributes of RMB assets, and the prospect of RMB assets is still good. However, considering the current multi-point spread of the domestic epidemic and the great pressure on economic and social development, domestic monetary policy still needs to remain determined. In the short term, the key to the Sino US interest rate spread lies in the trend of US bond interest rate, and there is still the possibility of further narrowing the Sino US interest rate spread in the short term. With the thinning of the safety cushion of China US interest rate spread, the spillover effect of US bond interest rate on China bond interest rate may be more obvious, aggravating cross-border capital flows. It is necessary to strengthen macro supervision of cross-border capital flows and actively resolve relevant risks. At the same time, if we promote the high-level opening of the financial market according to the established rhythm and establish the expectation and policy reputation of China's opening-up, the long-term trend of foreign capital flowing into the domestic market will not change fundamentally. Improving exchange rate flexibility can better resist the impact of capital flows. Practice shows that the two-way fluctuation and increased flexibility of the RMB exchange rate will help absorb internal and external shocks, release market pressure in time and avoid unilateral expected accumulation. Although the recent impact of various news has increased the pressure of RMB devaluation, considering that the domestic US dollar liquidity is still abundant, there is little chance that the RMB will continue to decline. In addition, in recent years, the role of RMB exchange rate in macroeconomic regulation and automatic balance of payments stabilizer has been continuously strengthened, and China's foreign asset liability structure has been further optimized, which will help China better adapt to the adjustment and changes of monetary policy in developed economies. A strong economy makes a strong currency. The narrowing of the interest rate gap between China and the United States does not change the long-term attractiveness of RMB assets. It should be noted that long-term factors such as China's economic fundamentals, the depth of the financial market and institutional construction still play a decisive role. As long as we give full play to the advantages of effective epidemic prevention and control and large policy space, and maintain the development momentum of economic stability and consolidation, the external shocks will only be temporary, and the cross-border capital flows and RMB exchange rate fluctuations will eventually return to economic fundamentals. (Xinhua News Agency)