The so-called interest rate cut means that banks use interest rate adjustment to change cash flow. The interest rate cut reduces the income of bank deposits, leading to the outflow of funds from banks for investment or consumption. The increase of capital liquidity promotes the expansion and reproduction of corporate loans, encourages consumers to borrow money to buy bulky goods, and encourages financial speculators to borrow money to promote the prosperity of the crude oil market to a certain extent, which leads to the devaluation of the country's currency, promotes exports and reduces imports, and may eventually promote inflation and gradually overheat the economy. This is called cutting interest rates.

2. If the Fed keeps interest rates unchanged, what will happen to the prices of crude oil, gold and silver?

Generally speaking, the Fed keeps interest rates unchanged and has the effect of "quasi-interest rate reduction". At present, the Federal Reserve keeps the federal funds rate at a low level of 0-0.25%. This brings very low capital borrowing costs, encourages enterprise investment and household consumption, and contributes to the economic growth of the United States. At the same time, it also led to a decline in the exchange rate of the US dollar, which promoted exports and thus accelerated the recovery of the US economy. When the Fed's interest rate cut cycle ends, it will keep interest rates unchanged for a period of time as an observation period. This period may be relatively long, the general economy is still relatively weak, and it needs to be gradually restored to the pre-recession level before deciding the policy direction. With the increase of the dollar money supply, the dollar index will continue to decrease, while the price of crude oil denominated in dollars will continue to rise, thus driving the rise of gold and silver.

The Fed kept interest rates unchanged, which basically boosted crude oil prices. But there are exceptions, which can be explained from two aspects: First, the Fed keeps interest rates unchanged, which pushes up the price of crude oil, sometimes in the afternoon.

Keeping interest rates unchanged by the Federal Reserve is not the only factor that dominates the rise and fall of crude oil prices. Sometimes it is necessary to combine other factors at that time for comprehensive analysis. For example, on the night of the interest rate decision on June 28, 2009, although the interest rate was announced to remain unchanged, the US House of Representatives finally voted to pass the economic stimulus plan of $81900 million at that time, and the rising risk appetite boosted market confidence, driving the US stock market and the US dollar to rebound. In the end, crude oil fell instead of rising.

Third, if the Fed raises interest rates, what impact will it have on crude oil, gold and silver?

Raising interest rates is the behavior of the central bank of a country or region to raise interest rates, which increases the borrowing cost of commercial banks and other financial institutions to the central bank, and then forces the market interest rate to rise. The purpose of raising interest rates includes reducing money supply, curbing consumption, curbing inflation, encouraging private deposits, and slowing down or curbing market speculation. Raising interest rates can also be used as an indirect means to increase the value of domestic currency or local currency against other currencies.

Generally speaking, when a country's economy is overheated and inflation is getting more and more serious, it can cool the economy by raising interest rates. The Fed's interest rate hike will promote the appreciation of the US dollar and put some pressure on crude oil commodities. However, the specific economic environment needs to be comprehensively analyzed in combination with factors such as the economic cycle at that time.

Generally speaking, crude oil, gold and silver are directly linked to the US dollar. The increase in the interest rate of US dollars will inevitably lead to the support of buying US dollars in the international market, and more people will buy US dollars because they can get interest. Then, the continuous 17 interest rate increase of the US dollar means that crude oil will be sold with the rise of the US interest rate.