It is difficult for ordinary people to understand Fed rate hike , what impact does it have on my life? Then we can review Fed rate hike last time hike
In the past four decades, the Federal Reserve has had 6 interest rate hike cycles, including the famous Volker in the 1980s to fight inflation. These interest rate hike cycles are rich in types, including high inflation caused by supply-side pressure, bubble pressure brought by real estate and stocks, and the normalization process after the implementation of unconventional policies.
1.1983.3-1984.9: The impact of oil supply is superimposed on the policy goals, and the United States has entered a vicious cycle of stagflation. After taking office as chairman of the Fed, Volker took controlling inflation as his core goal, implemented a tough austerity policy, strictly controlled the increase in currency in the early 1980s, and then turned to rate hikes.
2.1987.1-1989.7: 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 US dollar depreciated and inflation rose, and the Fed responded by hiking interest rates.
3.1994.2-1995.2: Rapid rebound after the recession, and the economy and stock markets showed signs of overheating. The Fed's rate hike rate was subsequently higher than market expectations, and the bond market was in a big turmoil. During this period, the Federal Reserve began to increase its inflation expectations.
4.1999.6-2000.5: Under the impact of the Asian financial crisis, the Fed cut interest rates to respond. In June 1999, the Federal Reserve decided to withdraw its monetary easing policy and began hike interest rates, which followed by the bursting of the Science and Technology Network bubble.
5.2004.6-2006.6: In 2001, as the stock market plummeted, the Federal Reserve cut interest rates sharply. Since then, the economic recovery and rising housing prices have caused concerns about asset bubbles, and the Fed has once again started the process of hikes.
6.2015.12-2018.12: After the long-term zero interest rate and QE policy, the Federal Reserve began the process of normalizing monetary policy. The pace of interest rate hikes in the early stage is cautious, and it is significantly accelerated or even radical in the later stage. The hawkish level is much higher than market expectations.
As ordinary people, we can understand this interest rate hike this time, that is, the United States is going to cheat, and to fetch your originally not wealthy family again, so that you will have no money. When the price of buying things is high, it is still too small. Such as vegetables, meat, eggs, milk and other products.
As ordinary people, what strategies do we have to deal with?
1. Reduce unnecessary expenses
2. Don’t touch real estate and other financial products that make you lack liquidity
3. As the stock market is sluggish, buy stocks or three-year financial products appropriately. Because when the spring presses to the lowest level, there will be an explosion.
How did China perform during this interest rate hike?
can only be said to be average in terms of performance. At present, the country has begun to hover around the interest rate or real estate protection again?
protection interest rates The real economy will develop healthily in the later stage, but it will be uncomfortable at this stage because more real economy and exports will have an impact. However, if the interest rate is kept, we will attract more funds to invest in China and will not be cut off by the United States; if there is more money, the development of technology, urban development, and economic development will get better and better.
Why should we protect real estate?
is mainly the collapse of real estate. And too many speculators have kidnapped the state's strategy in real estate. For example, cities across the country are now calling on everyone to buy houses, but everyone can no longer buy them. Why are we encouraged to buy a house? This involves the relationship between state taxation, bank loans and individuals.
In the past days, 80% of China's cities relied on selling land to increase local fiscal revenue, and banks loaned money to individuals, and individuals were burdened with local fiscal revenue. In other words, it seemed that everyone was happy at the time. I have a house in person, real estate companies have money, and local finances have income to develop cities, but most local finances are not used in places that should be used. For example, the development of local economy is more of a short-sighted thing today is today's thing, and tomorrow has nothing to do with me. The deficit caused is getting bigger and bigger. I can see what real estate is now. However, if the real estate market is not squeezed out, the consequence is that ordinary people have no money and save money to pay off their mortgages.If there is no money on the market, then the company cannot develop, and the company cannot develop, and the salary will be unemployed and laid off without wages. If you are unemployed and laid off, you have no money to pay your mortgage. If the bank goes bankrupt if there is no money to pay the mortgage, the bank goes bankrupt. Then you can see what Japan looks like when it stops.
The Federal Reserve raises interest rates, and the international hot money returns to the United States. China's response measures can only be said to be passing. No one knows what the future will be. It is hard to say what will happen in the future. One thing is that you really don’t buy a house at this time.
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