The impact of the Fed s interest rate hikes, and what will be the impact of the Fed s rate hikes

The Federal Reserve raises interest rates.

The effects are as follows:1. The Federal Reserve will raise interest rates, and deposits in banks will increase, so the amount of money used for market consumption will decrease, which will indirectly lead to a decrease in the sales volume of China's exports**; 2.If the dollar appreciates after the Fed raises interest rates, then the money market.

The currencies of other countries, including the renminbi, will depreciate in the short term, and the depreciation of the renminbi will directly lead to the intensification of China's capital outflows; 3.As the U.S. dollar appreciates, dollar-denominated commodities **will**. For example, foreign oil prices.

will**, indirectly have a reaction force on the adjustment of China's oil prices, and have to be lowered. 4.In the long run, if the Fed raises interest rates after a certain period of time, it will also enter a cycle of interest rate cuts, then the RMB will be ** against the US dollar, the RMB and other foreign currencies will **, and a large amount of capital will flow into China.

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1.The Federal Reserve will raise interest rates and deposit bank deposits will increase, 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 Federal Reserve raises interest rates, the US dollar appreciates, then the currencies of other countries in the currency 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 dollar appreciates, the commodities denominated in US dollars will **, for example, foreign oil ** will go down, which will indirectly exert a reaction force on the adjustment of China's petroleum **, and it has to be lowered;

4.If in the long run, the Fed will also enter an 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 currencies will be **, and a large amount of capital will flow into China.

The Fed's interest rate hike will cause funds from other countries to flow to U.S. banks, so at this time, for foreign countries, after the reduction of liquidity, it may be bearish for the economy and **. And the United States itself will have its own money in the financial market flowing back to the banks, which may cause the US stock market to plummet;

After the US dollar raises interest rates, the US dollar appreciates, and other countries may depreciate their currencies if they do not follow the interest rate hike, which is not conducive to the development of import enterprises;

If the dollar rises, then the dollar-denominated commodities will be.

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.

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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First, the currency has depreciated greatly

As we all know, each round of US dollar interest rate hikes will trigger overseas US dollars to return to their home countries, leading to a sharp currency depreciation in countries around the world, especially emerging developing countries that rely on foreign capital (such as Brazil, India, Vietnam, Tunatamji, etc.).

The reason for the depreciation is also very simple: if foreign capital wants to withdraw from a certain country (let's say it is country F), it will sell the assets of country F, such as **, **, bonds, and houses, and cash out to get the currency of country F; However, it is impossible for foreign investors to bring the currency of country F back to the United States, they need to convert the currency of country F into dollars before flowing back to their home country.

2. The Great Recession

Every time the Fed starts a rate hike cycle, emerging countries raise their own interest rates to curb the pace of foreign capital outflows and currency depreciation.

Unfortunately: every time the Fed raises interest rates, it is in the aftermath of the global economic crisis; At this time, the United States cut a wave of global leeks in the state, and the economy is almost recovering; Emerging countries, on the other hand, have not yet fully survived the recovery.

Third, the debt collapse

As mentioned earlier, the Fed's interest rate hike will cause the currencies of emerging countries to depreciate, which is very likely to trigger a major debt collapse in a country, especially one with high external debt.

After the official interest rate hike, India, Vietnam, Brazil, and Mexico, which have too high a ratio of foreign debt to GDP, will also face a severe test.

Fourth, the stock price plunged

The Federal Reserve raises interest rates, and foreign capital wants to withdraw from a country, so they must first sell off their assets such as **, **, bonds, etc., which will definitely trigger a big dive in the ** and bond markets.

After the last Fed rate hike (December 2015), there was a general stock price phenomenon in emerging countries: the Shanghai Composite Index fell, and the Brazilian, Mexican, Thai, and Indian stock indices also fell by 5%-20%.

5. Hyperinflation

If a country's currency depreciates too hard during the cycle of US dollar interest rate hikes and foreign capital withdrawal, hyperinflation will occur in its country. The reason is very simple: the country needs to import energy, machinery and equipment, core components, food, 3C digital and other commodities, the US dollar ** is still unchanged, but the national currency denominated ** will soar, thus bringing imported inflation to the whole country, and finally passed on to every ordinary person.

The Federal Reserve's interest rate hike is a major event in the global financial market. In fact, there is a cycle for raising and cutting interest rates in the US dollar. After shifting from the interest rate cut cycle to the interest rate hike cycle, the global financial market often has short-term sharp turbulence, and the investment logic of many industries and sectors will have major changes at the macro level.

Therefore, for shareholders or basic people, the Fed's interest rate hike is a macro event that needs to be included in the scope of investment considerations.

The Fed's interest rate hike usually means that monetary conditions in the United States have shifted from easing to tightening. In this case, higher interest rates on the U.S. dollar will lead to an increase in the attractiveness of the U.S. dollar, which in turn will lead to an increase in the value of the U.S. dollar against the currencies of other major economies. In the financial market, the "dollar index" will be accompanied by a gradual upward trend of the Fed's interest rate hikes.

The emergence of this trend means that active investors in the global market will gradually increase their demand for the US dollar, which will make investors sell other types of currencies, **US dollars. In this process, the currencies of many developing countries will depreciate sharply, and even some of the weaker economies will experience significant turbulence caused by currency depreciation. We can find clues to this situation in many financial reports in the last US dollar interest rate hike cycle.

However, for China's financial market, the impact of the Fed's interest rate hike is much smaller than that of other developing countries. On the one hand, China is the world's second largest economy, the power of manufacturing is getting stronger and stronger, and the foreign exchange reserves are also very sufficient. This economic force makes us less exposed to external shocks during the Fed's interest rate hike cycle.

On the other hand, China's ** market is not a market dominated by foreign capital. Although foreign capital accounts for a considerable proportion of many weighted constituent stocks, its overall proportion in the domestic capital market is still limited. The game of domestic funds, domestic institutions, foreign-funded institutions and other forces will make the A** field in the Fed's interest rate hike cycle appear structurally differentiated.

However, for investors and the public, investment decisions in the Fed's interest rate hike cycle need to be extra cautious. After all, the macro environment of the Fed's interest rate hike cycle is not conducive to the bullish forces in financial markets. In short, "investment is risky, and you need to be cautious when entering the market" is a principle that every investor needs to keep in mind.

The impact is particularly severe, which will lead to more and more deposits in the bank, and then the amount in the market will become smaller and smaller, and the transaction rate will become lower and lower, and then the ** of bulk products will also **, and then it will also affect the country's macroeconomic policy.

It affects the changes in the market, but also affects the way of investment, affects the economic development of the market, will produce a lot of changes, and will affect the interest.

The Fed's interest rate hike will affect the liquidity of the global market, and the US dollar's crude interest rate hike will lead to a shrinkage of global liquidity. For those countries with dollar debt, it will make it more difficult to borrow new debt, and it will also make it more expensive to borrow new debt.

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 market speculation, and so on. 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.

The Federal Reserve's interest rate hike refers to raising the deposit and loan interest rates of banks, and the most direct impact of raising the deposit interest rate is that it will increase the deposit income of investors deposited in Zaowen Bank and increase the savings of banks.