January 20, 2017 is a big day for the American people! The president-elect of the United States Trump will officially take office on this day.
As the saying goes, "the three things that a new official needs to do when he takes office", then, what is Trump's "first thing to do" after moving into the White House? industry insiders have speculated that this first fire may burn down the Federal Reserve!
What is the Federal Reserve? The editor of jintou.com said that the full name of the Federal Reserve is " United States Federal Reserve System ", which is divided into two parts: the Federal Reserve Bureau, which is a government agency; and the Federal Reserve Banks, which are scattered throughout the country, with a total of 12, and are non-profit institutions.
The scope of authority of the Federal Reserve is equivalent to our China's People's Bank of China , which is mainly to combat inflation and achieve full employment.
As for why the Federal Reserve is responsible for performing the duties of the central bank of the United States, but why it does not use the name "central bank", the reason is that in the era when the Federal Reserve was created, the central bank has always been notorious, The US Constitution also stipulates that the establishment of a central bank is not allowed.
Since the establishment of a central bank is not allowed, the large consortium established the "Federal Reserve" and used the name of "federal" to deceive Americans. Of course, many Chinese people were also deceived.
Some people say: "It is much more difficult to be the chairman of the Federal Reserve than our central bank governor!" In fact, in the media, we can see that the chairman of the Federal Reserve is often publicly criticized by the outside world.
For example: When Trump was running for president, he criticized the Federal Reserve and Chairman Yellen, accusing the Federal Reserve of creating a "bubble economy" by "artificially lowering" interest rates, thereby helping US President Obama and his Democratic opponent Hillary.
"Ms. Yellen should be ashamed of herself. I have always wanted the Fed to remain independent in the past, but obviously the Fed has not done that. What is obvious is that it has not even been basically independent." Trump said in an interview with the media .
Not only has Yellen, the current chairman of the Federal Reserve, been undermined, but former chairman Bernanke has also been frequently criticized by Wall Street and the media for not being qualified to be chairman.
Industry experts analyze that Trump’s victory may bring political pressure to the Federal Reserve that has not been seen in decades, as well as leadership uncertainty.
becauseTrump has indicated that he may not nominate Yellen to continue serving after her term as Fed chair ends in early 2018, but will prefer to choose a Republican.
Although the Chairman of the Federal Reserve is often "bullied", which makes people feel that they are relatively weak, regarding the decision-making of monetary policy, the Chairman of the Federal Reserve is actually very strong, and the decision-making process is also very old-fashioned. From this point of view, the Chairman of the Federal Reserve is more powerful than the Governor of the People's Bank of China. Much better.
Of course, when talking about the Federal Reserve's monetary policy, we have to mention "the Federal Reserve raising interest rates." The editor of jintou.com saw a piece of news today saying: The Federal Reserve may raise interest rates faster than expected in 2017!
Jane Hazus, chief economist at Goldman Sachs , said: "The Federal Reserve will raise interest rates up to four times this year, which is more than most investors currently expect and one more than the three rate hikes expected by the Federal Reserve. "
Hatzius also predicted that there is a 35% chance of the Federal Reserve raising interest rates in March 2017! The main reason is that the just-released December 2016 employment report showed strong wage growth, which increased the probability of an interest rate hike in March.
So, the question is: What will be the impact of the Fed's interest rate hike? As the saying goes: It is human to make mistakes, but mistakes by the Federal Reserve mean that the country's wealth will be wiped out and millions of people will lose their jobs. Therefore, it is of great significance for the Federal Reserve to raise interest rates!
It is understood that the world will pay attention to the Federal Reserve's interest rate hike. The main reason is not the large GDP of the United States, but because the US dollar is the world's main reserve currency and trading currency. Most of the world's transactions use the US dollar, and many commodities are also used. Prices are priced in US dollars. Therefore, the impact of the Fed's interest rate hikes on the global economy is relatively large.
Take gold as an example. Since the international gold market is mainly priced in US dollars, it is relatively sensitive to changes in the value of the US dollar.
In many cases, there is such a phenomenon: "When the dollar rises, gold falls, and when the dollar falls, gold rises." Therefore, after the Federal Reserve raises interest rates, theoretically speaking, the gold price is very likely to fall.
Some people are worried: Will the price of gold be the same as the price of oil, "following the rise but not the fall"? Below , the editor of Jintou.com will tell you about the conversion method of international gold prices and domestic gold prices:
1 ounce of is equal to 31.1035 grams. The international gold price is calculated in US dollars. The current exchange rate between RMB and US dollars is around 6.9. The calculation is to multiply US dollars by 6.9. Then divide by 31.1035. The number
is the gold price of on the Shanghai Gold Exchange. It is also the real-time price at which people buy paper gold and gold bars at banks.
