Just on 77htmlOn April 4, Feder again announced interest rate hike 754 basis points, raising the target range of federal funds rate to 2.25% to 2.5%. According to data, the Federal Reserve has raised interest rates four times since April this year, and the cumulative interest rate hikes this year have reached 4 basis points for 225html. Affected by this, the European Central Bank took the lead in hiring 50html for 4 basis points, and the Bank of Canada also unexpectedly raised hiring 100html for 4 basis points. Even the Hong Kong Monetary Authority followed closely, raising the benchmark interest rate by 75 basis points. The reason why
caused the Federal Reserve to raise interest rates continuously was mainly due to the inflation level in the United States. According to data, the inflation situation in the United States is still difficult to alleviate. 6html reached 9.1% in April, and the inflation in the United States hit a new high in 41html in 4 years. According to relevant Fed persons, they will reduce the U.S. inflation rate to the level of 2% at all costs. Obviously, at least in the short term, the pace of the Fed's interest rate hike will not stop.
However, the latest interest rate hike by the Federal Reserve has triggered a sharp rise in U.S. stock , among which Nasdaq index rose by 4%, setting the largest increase since 2020 . In this regard, we believe that the US stock market has rebounded strongly after the Fed's interest rate hike, mainly because the Fed has raised interest rates for 4 times this year, and has raised interest rates by 4 basis points in a total of 225html. The US stock market believes that there will not be too much room for interest rate hikes in the future. However, whether US stocks can continue to rebound in the future depends on the recovery of the US economy.
Now many people will propose, what impact will the Federal Reserve raises interest rates continuously and significantly, have on my country's market? First, the sharp interest rate hike of the Federal Reserve will greatly push the dollar index to a higher level. At present, the US dollar index has stood above 106. The rebound of the US dollar index will cause a certain depreciation of the RMB exchange rate of and , which will improve the competitiveness of my country's export commodities. Especially this year, due to the repeated impact of the epidemic and the domestic economy is relatively difficult, the moderate depreciation of the RMB exchange rate is beneficial to my country's exports.
Second, the Federal Reserve's sharp interest rate hike will cause the US dollar index to hover at a long-term high, and the RMB exchange rate will depreciate, which will attract a large number of international hot money to sell RMB-denominated assets and return to the US mainland. At that time, the domestic stock market and real estate bubble will burst. However, our country is controlling capital projects, and it is difficult for hot money to flow out in a large amount of money in the short term. Therefore, asset bubbles such as the domestic stock market and real estate market will be affected to a certain extent by the Federal Reserve's interest rate hike, but the impact will be smaller than other emerging economies, countries.
Third, the Federal Reserve's sharp interest rate hike will keep the US dollar index strong all the time, and the RMB exchange rate will depreciate to a certain extent. This will have an adverse impact on my country's import of bulk commodities , because the price of imported raw materials will rise, which will eventually be reflected in the prices of goods produced by enterprises. This also means that ordinary people in China have to spend more money to buy.
Recently, the Federal Reserve announced a hike of 75 basis points, which is the fourth time this year's hike of 3html has been hike since April. The Fed raises interest rates mainly to deal with the high inflation level in the United States. So, what impact will the Federal Reserve raises consecutively sharp interest rates have on my country?
This will mainly lead to a certain depreciation of the RMB exchange rate, which is conducive to domestic commodity exports and is beneficial to the current domestic economic growth. However, it will also lead to a large amount of hot money selling assets denominated in RMB (including stocks and real estate) to the United States. More importantly, after the RMB exchange rate depreciates to a certain extent, it will lead to an increase in the prices of imported commodities, and the domestic inflation pressure will increase.
