What it means for the Fed to raise interest rates

The Federal Reserve raises interest rates, and the dollar will rise, and in dollar terms, **and **** will**. Actually, we've talked about this topic many times. Theoretically, news related to the Fed's interest rate hike would boost the US dollar, which would weigh on gold and oil prices.

However, since 1994, the Federal Reserve has raised interest rates a total of 33 times, and according to statistics, the number of times the dollar showed **** on the day of the rate hike was as high as 15 times, only 3 times less than the number of ****. This means that a Fed rate hike does not necessarily lead to a dollar**, and statistically it is almost 50% probable.

At 2:00 a.m. this Thursday, the market will usher in the Federal Reserve's FOMC interest rate decision, which is different from the past two years, if the Fed decides to raise interest rates in March, it must be an extremely hawkish performance, then three rate hikes this year will become a high probability event. Theoretically, the odds of **** this time are very high, but don't forget that in the week when the Federal Reserve released hawks one after another, gold prices seem to have priced in advance for a rate hike in March.

And on Friday's beautiful non-farm payrolls, gold rose by more than $10 and regained its foothold above $1,200 an ounce. Therefore, investors who want to rely on the Fed to raise interest rates to make a handful of money may need to think twice.

What is the Fed rate hike?

Why is the Fed raising interest rates? What does the rate hike mean for the United States?

The impact of the Fed's interest rate hike is as follows: 1. The Fed's interest rate hike will increase bank deposits, so the amount of money used for consumption in the market will decrease, which will indirectly lead to a decrease in China's export sales; 2. After the Fed raises interest rates, the US dollar appreciates, then the currencies of other countries in the money market, including the RMB, will have a short-term depreciation, and the depreciation of the RMB will directly lead to the intensification of China's capital outflow; 3. If the US dollar appreciates, then the US dollar-denominated commodities will **, for example, foreign oil ** will go down, and the adjustment of China's oil ** will indirectly exert a reaction force, so it has to be lowered: 4. If in the long run, the Fed will enter the interest rate cut cycle after a certain cycle after raising interest rates, then the RMB will be ** against the US dollar, the equivalent value of RMB foreign currency will be **, and a large amount of capital will flow into China.

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It shows that the Fed's interest rate hike is to reduce the amount of dollars in circulation. The lack of international financial flows has affected the continuity of the situation. This is also the hegemony of the US dollar in international exchanges, when there is no actual currency to replace the US dollar, or when there is no feasible solution, whether to use SDR as a means of circulation?

1. After the Federal Reserve raised interest rates, first of all, the lending rate between various banks was raised, which is a bad thing for banks in the whole United States, and the cost of borrowing money between banks needs to be increased.

The increase in the borrowing interest rate will lead to an increase in the borrowing interest rate in the U.S. market, and at the same time, it will cause changes in the whole social market.

2. The Federal Reserve raises interest rates in layman's terms, in order to increase the mutual interest rate of finance and raise the U.S. currency.

The value of the dollar, so that the value of the dollar has been increased, in disguise, for the currencies of other countries in the whole society, it is depreciation, this interest rate hike also means these, in addition to the increase in the currency in the market, there will be a lot of problems, which is also inflation.

One reason is that inflation is also a situation where the Fed raises interest rates, which also raises the currency of its own country, increases the exchange rate between countries, and so on.

Extended information: 1. The impact of the Fed's interest rate hike on China's economy.

In terms of the impact of the Fed's interest rate hike on China's economy, CITIC**.

Chief economist Zhu Jianfang believes that the short-term impact of the Fed's interest rate hike on China's economy will increase, which will mainly affect China's economy through three factors:

1、**。The Fed's interest rate hike again indicates that the U.S. economic recovery is clear, and due to the economic status of the U.S., it will be possible to slightly improve the weak global ** situation, which is positive for China's export improvement;

2. Monetary policy.

In the context of the current stable tone of China's monetary policy, the task of curbing asset bubbles and preventing economic and financial risks, and rising inflation, the Fed's interest rate hike may further limit the space for China's monetary policy.

3. Foreign exchange. Due to the profit-seeking nature of capital, the return on US dollar assets.

The increase will put further pressure on the renminbi if the frequency of interest rate hikes is higher in 2017, and foreign exchange reserves.

There will also be more pressure. Overall, the Fed's interest rate hike will have both good and bad impacts on China's economy, but the economy may be greatly affected in the short term. It believes that after the interest rate hike lands, it is mainly necessary to pay attention to Trump.

The impact of policies on the economy after taking office.

A U.S. interest rate hike means that the Fed raises the Fed's Fed interest rate or other interest rates. This means that the cost of borrowing will rise, with an impact on consumer spending and investment. A U.S. interest rate hike is often seen as a signal of U.S. policy tightening, as it can slow economic growth and could lead to a rise in bond yields.

In addition, the US interest rate hike could also lead to a stronger US dollar, negatively impacting the export sector.

The above content is only an answer to financial questions, involving historical data does not indicate future returns, does not constitute any investment advice, please choose the investment varieties suitable for your own risk tolerance on the basis of a comprehensive understanding of the product or service, investment is risky, you need to be cautious when entering the market! ）

1. What isThe Federal Reserve raises interest rates

The so-called Fed interest rate hike, simply put, is the Fed's behavior of raising interest rates, affecting the economy and society through interest rate hikes, and the Fed's function is equivalent to that of the US central bank.

The decision on whether to raise interest rates will be based on the economic development of the United States.

2. How does the Fed achieve interest rate hikes?

Every 6 weeks, the FOMC is in Washington.

A meeting is usually called a meeting, and it is usually held weekly.

2. Open for two days on Wednesday. 8 times a year.

3. What is the impact of the Fed's interest rate hike on China?

If the Fed raises interest rates, the pressure on the RMB to depreciate will increase. The Federal Reserve's interest rate hike will increase the interest rate on deposits of American depositors. Therefore, international investors will be more willing to hold the dollar, and international hot money has poured into the United States one after another.

The U.S. dollar strengthens and appreciates relative to other currencies, so other currencies depreciate relative to the U.S. dollar.

4. What is the relationship between interest rate hikes and U.S. Treasury yields?

After the interest rate hike, the market interest rate.

rises, the interest rate on bond issuance, especially the interest rate on short-term Treasury bonds. Of course, interest rates on long-term government bonds will also rise.

Fifth, the impact of the Federal Reserve's interest rate hike on **!

An interest rate hike is a reduction in market liquidity by the central bank.

a strategy. By raising interest rates, central banks can increase bank deposits.

The purpose of reducing market investment and increasing the value of the local currency. If the Federal Reserve announces an interest rate hike, it means that the dollar will appreciate, and if the dollar appreciates, investors will increase their investment in the dollar, thereby reducing their investment in **. The decrease in the number of people and funds invested in ** will inevitably lead to **.

Target**. Sixth, on the contrary, if the Federal Reserve cuts interest rates, the impact on **

Interest rate cuts are a strategy of the central bank to increase market liquidity. By cutting interest rates, the central bank can achieve the goal of reducing bank deposits, increasing market investment, and reducing the value of the local currency. If the Fed announces an interest rate cut, it means that the dollar will depreciate, and if the dollar depreciates, investors will reduce their investment in the dollar, thereby increasing their investment in **.

The increase in the number of people and funds invested in ** will inevitably lead to **.

A U.S. interest rate hike is a Fed interest rate hike, which means that the interest on U.S. deposits has increased.

Since the U.S. dollar is an international currency, the interest rate increases, and people will consider depositing their deposits in banks to earn interest.

Naturally, if the amount of dollars circulating in the market decreases, the dollar will appreciate, and the renminbi will depreciate relatively.

The Federal Reserve's interest rate hike will have a great impact on us, such as: the reduction of export sales, the intensification of capital outflows, and the **will of commodities**.

The so-called Fed interest rate hike, simply put, is the Fed's behavior of raising interest rates, which affects the economy and society through interest rate increases. Impact of interest rate hikes on China: If the Fed raises interest rates, the pressure on the RMB to depreciate will increase. The Federal Reserve's interest rate hike will increase the interest rate on deposits of American depositors.

The Fed's goals in raising interest rates include reducing money**, suppressing consumption, suppressing inflation, encouraging deposits, slowing market speculation, and more. Interest rate hikes can also be used as an indirect means of increasing the value (exchange rate) of the country's or region's currency against other currencies.

1. After the Federal Reserve raised interest rates, first of all, the lending interest rate between various banks was raised, which was a bad thing for banks in the whole United States, and the cost of borrowing money between banks needed to increase, and the increase in the lending interest rate of American banks would lead to an increase in the lending interest rate of the American market, and at the same time, it would cause changes in the whole social market.

2. The Federal Reserve's interest rate hike is generally said to increase the mutual interest rate of finance, increase the value of the U.S. currency, so that the value of the U.S. dollar has also been improved, in disguise, for the currencies of other countries in the whole society, it is depreciation, and this interest rate hike also means these, in addition to the increase in the currency in the market, there will be many problems, which is also a cause of inflation, inflation is also the situation that the Fed raises interest rates, and the Fed's interest rate hike is to improve its own country's currency, which increases the exchange rate between countries and so on.

The Federal Reserve's interest rate hike refers to the decision of the Federal Reserve System Management Committee to adjust monetary policy and raise the federal interest rate after the Federal Reserve System Management Committee held an interest rate meeting in Washington. To put it simply, raising interest rates is a type of tightening monetary policy, and the Fed responds to the current economy by raising interest rates. In general, interest rate hikes can increase bank interest rates, thereby reducing the amount of money**, and the dollar will appreciate.

The Federal Reserve's interest rate hike is the behavior of the ** bank in a country or region to raise the interest rate, which makes the borrowing cost of the commercial bank to the ** bank increase, and then forces the market to increase the interest rate.

The purpose of raising interest rates includes reducing money**, suppressing consumption, suppressing inflation, encouraging deposits, slowing down market speculation, and so on. Interest rate hikes can also be used as an indirect means of increasing the value of the country's or region's currency against other currencies.

The reasons for the Fed's interest rate hikes include controlling inflation, accelerating economic development, and maintaining long-term growth in monetary and credit aggregates in line with the long-term potential growth of the economy, so as to effectively promote the goals of full employment, stable prices, and moderate long-term interest rates.

The Federal Reserve raises interest rates, which will increase the interest on deposits of American depositors, increasing everyone's willingness to save, and for the US dollar, it is a kind of appreciation, investors will be more willing to hold the US dollar, in the foreign exchange market, it is manifested as a strong US dollar, and other currencies are relatively depreciating compared with the US dollar.

From a market point of view, to a certain extent, it controls the hot money lending that will lead to a financial bubble, avoids the economic bubble caused by inflation, and also protects the dollar's position as the world's main reserve currency. From an investment point of view, it is not optimistic because the funds in the market are reduced and returned, but for US bonds, US Treasury yields will increase.

Interest rate hike is the increase in interest rates of ** banks in a country or region, including interest on deposits and loans, so that the cost of borrowing from commercial banks to ** banks increases, or the interest on savings increases.

However, unlike China's central bank interest rate hike, the Federal Reserve's interest rate hike does not refer to the deposit and loan interest rate of commercial banks, but the federal interest rate. This interest rate has a substantial impact on the interest rate of commercial banks, because the surplus of reserves can have an impact on bank deposits and loans. Therefore, although the Federal** interest rate is not the deposit and loan interest rate, it will affect the deposit and loan interest rate.

Rate hike cycle

The oil supply shock and the ambiguity of policy objectives have put the United States into a vicious circle of stagflation. After Volcker became the chairman of the Federal Reserve, he took inflation control as his core goal, pursued a tough tightening policy, strictly controlled the increase in money in the early 80s, and then turned to raising interest rates.

Inflation control has gradually become the Fed's policy goal, and the Taylor rule has been gradually introduced, clarifying the positive relationship between high inflation and interest rate hikes. During this period, the dollar depreciated, inflation rose, and the Fed responded by raising interest rates.

Rapid after a recession, the economy and ** show signs of overheating. Subsequently, the pace of the Fed's interest rate hike exceeded market expectations, and the bond market was sharply volatile. During this period, the Fed began to increase the guidance of inflation expectations.