By observing the above figure, we can find the following rules: The Federal Reserve's monetary policy is generally countercyclical, and a interest rate hike cycle is started when the economy is expected to enter a period of prosperity or inflation enters an upward channel.

Core economic data before and after the Fed's previous interest rate hikes

Observe the above figure, we can find the following rules:

The Fed's monetary policy is generally countercyclical, and it starts the interest rate hike cycle when the economy is expected to enter a prosperous period or inflation enters an upward channel.

Modern trade is dominated by resource endowment. For example, even if the oil and gas prices in Germany soar, the high-end petrochemical industry will not be stopped in the short term (BASF ), because once the suspension of work and resume work will bring irreparable cost losses; even if the US dollar soars, many high-end parts and instruments and equipment in China have to import from the United States.

Due to the trade rigidity of consumer production in various countries, at the beginning of the interest rate hike cycle, even if the US dollar strengthens to impact product exports, the economic fundamentals of the United States will not deteriorate.

Federal Chairman-Powell

On the contrary, the global capital return driven by interest rate hikes will help the United States continuously improve its economy under the driving force of internal motivation until interest rate levels reach a certain level have a negative impact on the economy. At this time, the economic data weakened, the interest rate hike cycle ended, and the interest rate cut cycle was replaced. This is the general rule of the resonance between the Federal Reserve's interest rate hike cycle and economic growth.

In previous interest rate hike cycles, suppressing inflation is an important goal of the Federal Reserve's interest rate hike, but at the end of each interest rate hike cycle, CPI has increased compared to the initial CPI. Why is this? Let’s look at the unemployment rate. The unemployment rate at the end of the previous interest rate hike cycles is lower than the initial unemployment rate.

hike rate is on the surface to curb inflation. The deeper purpose is to promote global capital flow, so that borrows new and returns old , realizes the global transfer of domestic risks , and maintains the core growth momentum of the domestic economy.