Faced with this situation, the Fed believes that measures must be taken to curb inflation and promote economic growth. Raising interest rates is one of the measures. Raising interest rates can increase loan interest rates, reduce consumption and investment, and thus curb inflation; At the same time, it can attract more capital into the United States, increase investment and create employment opportunities, and promote economic growth.
Secondly, raising interest rates by the Federal Reserve can also increase the value of the dollar. The US dollar is one of the most important reserve currencies in the world, and its exchange rate has an important impact on the global economy. Raising interest rates can improve the interest rate advantage of the US dollar, attract more capital to flow into the United States, and thus push up the exchange rate of the US dollar. This can not only promote the economic growth of the United States, but also improve the position of the United States in the global economy.
The Federal Reserve System is the highest monetary policy institution in the United States. Its main responsibility is to formulate and implement monetary policy, maintain financial stability and promote economic growth. In recent years, the Fed's interest rate hike policy has attracted much attention. So why did the Fed raise interest rates?