Inflation. Fed's interest rate hike (here refers to the deposit interest rate) is a monetary tightening policy, which is good for the dollar and bad for gold; If the Fed's interest rate cut indicates a loose monetary policy, then the Fed has implemented quantitative easing three times in the past few years, and the price of gold has also risen rapidly during this period. The fund interest rate is different from the benchmark interest rate. The federal funds rate in the United States refers to the interest rate in the American interbank lending market, which is the most important overnight lending rate. This interest rate change can sensitively reflect the surplus and shortage of inter-bank funds. By targeting and adjusting the interbank lending rate, the Federal Reserve can directly affect the capital cost of commercial banks and transfer the surplus and deficiency of funds in the interbank lending market to industrial and commercial enterprises, thus affecting consumption, investment and the national economy. Although the adjustment of the federal funds rate and rediscount rate was announced by the Federal Reserve, the methods are divided into administrative regulations and market functions, and the adjustment effects are also different, which may be an important reason why the federal funds rate gradually replaces the rediscount rate and plays a regulatory role. If the Federal Reserve raises the federal funds rate, the bank financing cost will increase, the loan interest rate will increase, the loan scale will be affected, and the dollar circulating in the market will decrease, which will benefit the dollar and be bad for gold; If the Federal Reserve lowers the federal funds rate, the cost of inter-bank financing will be reduced, the lending capacity of banks will be improved, and more money will enter the market, which is not good for the US dollar but good for gold. If the Federal Reserve raises the federal funds rate, the bank financing cost will increase, the loan interest rate will increase, the loan scale will be affected, and the dollar circulating in the market will decrease, which will benefit the dollar and be bad for gold; If the Federal Reserve lowers the federal funds rate, the cost of inter-bank financing will be reduced, the lending capacity of banks will be improved, and more money will enter the market, which is not good for the US dollar but good for gold.