Reducing interest rates will reduce the income of the money fund, and raising interest rates will increase the income of the money fund.

Because the main investment direction of the money fund is that the deposit interest rate and interest rate of such assets will be lowered for a period of time, if the benchmark interest rate rises when the money fund invests in banks again, then the money fund will invest in banks again. Therefore, the impact of raising interest rates and cutting interest rates on the income of the money fund is still very obvious.

Judging from the interest rate cut, it is obvious that the income of the money fund is declining. However, this decline was not immediately reflected after the interest rate cut.

Note that this is different from ordinary long-term bonds, because the duration of the bonds invested by the Monetary Fund is too short, and they are all within 1 year. That's why there is such a rule. If it is a long-term bond, the interest rate cut will make the bond price rise. Therefore, the IMF only reflects

Second, the impact of the Fed's interest rate hike and our interest rate cut?

Mainly because the Bank of China pursues an independent monetary policy, which is more conducive to the stable development of the domestic economy. China's central bank chose to cut interest rates mainly because of the following three factors: First, affected by the epidemic, domestic people now like to put their money in the bank, but they are unwilling to spend it. China's resident deposits have exceeded 100 trillion. Therefore, the central bank hopes to encourage people to consume by cutting interest rates, thus stimulating economic growth through consumption.

Furthermore, reduce the financing cost of the real economy, so that small and medium-sized enterprises can get better development. Affected by the epidemic, all walks of life are affected to varying degrees. In order to reduce the financing cost of small and medium-sized enterprises, so that small and medium-sized enterprises can successfully tide over this difficult period, and also to maintain the stable development of China's economy, reducing the financing cost of small and medium-sized enterprises is also a top priority for the Bank of China.

Finally, in order to protect the stability of the stock market and the property market and avoid ups and downs. As the Fed continues to raise interest rates and shrink its balance sheet, the appreciation of the US dollar and the depreciation of the RMB will cause a lot of hot money to sell domestic RMB assets and choose to flow out. Of course, due to China's strict foreign exchange control, hot money is not easy to flow out. However, the Central Bank of China has injected a lot of liquidity into the domestic financial market by cutting interest rates and mortgage interest rates, which is conducive to the stability of the domestic financial market in the short to medium term.

Third, the impact of interest rate hikes and interest rate cuts on the currency?

Its influence on currency: to a certain extent, it will reduce the currency circulating in society, increase bank deposits and alleviate inflation, but it will also lead residents to deposit a lot of money in banks to obtain income and curb consumption because banks raise deposit interest rates;

The increase in the interest rate of bank loans means that the cost of bank loans for enterprises increases, that is, the financing cost increases, which is not conducive to the development of enterprises.

4. What is the impact of interest rate cuts and interest rate hikes on the Monetary Fund?

Interest rate cuts have an impact on the money fund. For the sake of capital security, more and more investors allocate their funds "50-50", half of which is used to buy bond funds and the other half is used to buy money funds, which can meet unexpected needs. As a low-risk fund, money fund can be used as a cash management tool and still has investment value. After entering the interest rate cut channel, some investors choose long-term fixed deposit to lock in interest income, but in case they need to withdraw fixed deposit in advance, it will become current interest. Money funds can apply for redemption at any time, and their investment style is more stable than that of bond funds, and their income is generally equivalent to one-year time deposits. Investors who want to get no less than the interest income of bank time deposits and don't want to lose the liquidity of funds can consider the money fund.