Its all interconnected today, sir...
First thing that comes to mind is the need for liquidity resulting in a dump of a lot of their held assets. This includes significant holdings in Treasuries and US Equities. If those get unloaded, the equity prices fall and so do the treasuries. A decline in the price of the treasuries increases market interest rates for everyone, Fed action or not.
The second thing that comes to mind is price reductions to preserve market share. That is deflationary. Also less demand for commodities, such as oil, copper, steel, etc... That would reduce prices and that is also deflationary.
Deflation, in a rising interest rate environment is a pretty poisonous cocktail to our own economy, given that it is more of a house of cards than anything else right now.
First you say dumping/selling bonds in inflationary then you say what comes next is deflationary. So in the end big whoop. I am not afraid, China is a BS country trying to act like it has it crap together egged on by vulture capitalists. I call it gloBULLism.
Not for long.
our own economy, given that it is more of a house of cards than anything else right now
That being the case, the sooner it falls the better.