I hope this explanation will give you an intuitive feeling of the coming impact. At present, the yield of US Treasury bonds is 1.8%, and the valuation converted into stocks is 55 times. If the interest rate is raised by 50 basis points, the yield will increase to 2.3%, which is 43 times of the stock valuation. From 55 to 43, the valuation center fell by 22%. Overvalued stocks have a daily limit of 2 per capita. If the interest rate is raised by 150 basis points in 2022, the valuation will be around 50%.

This is not to mention the impact of table reduction. Shrinking the table = selling risky assets = the yield of government bonds will increase and more funds will be withdrawn from risky assets. Raising interest rates and shrinking tables will not be immediate, but boiling frogs in warm water. It takes a process for funds to reach a balance and then reverse, and risky assets may live a comfortable life.

What impact will the Fed raise interest rates?

This rate cut is the first time that the Federal Reserve has cut interest rates through an unconventional meeting since June 5438+ 10, 2008. At present, the impact of the virus on the world economy has already appeared. The interest rate cut by the Federal Reserve has made it clear to the whole world that the black swan, which first appeared in China and swept the world, has begun to have a huge economic impact on the world. This time, the Fed's interest rate cut will have the following effects on China:

First of all, it will help restore market confidence.

Because cutting interest rates can provide more liquidity for the market, it is usually considered as good news for the stock market.

Some insiders believe that the Fed's interest rate cut will help boost the market's confidence in the economic growth of the world's largest economy. In addition, other central banks around the world have recently taken measures to cut interest rates, which will help restore the confidence of the global market as a whole, help stabilize asset prices and financial risks, and of course benefit domestic A-shares.

Second, it may further promote real estate.

Some experts said that overall, the loan cost of the whole society has decreased. In this case, the relative loan cost of real estate is unlikely to go up.

Considering that some cities that are not restricted to purchase have recently introduced policies to support real estate development, if these policies are combined with monetary easing, it will probably promote the real estate market to some extent.

Third, wealth management income may decline.

Under normal circumstances, all kinds of wealth management products will fluctuate according to the capital market. In particular, the most used money funds, such as Yu 'ebao, are completely focused on money market policies. Therefore, once the interest rate is cut, it is likely to drive down the income level of the entire wealth management market.

Therefore, the Fed's interest rate cut is not a simple matter, and it is likely to have a greater impact on everyone's life.