What does the Fed mean by raising interest rates? What's the impact on us?
What the Fed raises interest rates is the adjusted US federal funds rate, that is, the interest rate of bank lending and collection. It is very expensive for banks to obtain funds, so in order to make money, banks will also raise the interest they charge when lending abroad. Therefore, the daily interest on deposits and loans will also rise.
The impact of raising interest rates on the country is that tight monetary policy can alleviate the market inflation caused by the previous large water release. First, when the cost of borrowing rises, the natural willingness to borrow will decrease. Secondly, the rising interest rate of bank deposits will also cause a large amount of market funds to return. Therefore, it will reduce the monetary funds in the market and ease inflation.
How does this affect us?
We know that the dollar is the world currency, so the opening and closing of the dollar will have an impact on us. The interest rate of the dollar has gone up, and the dollar has appreciated. Will the world dollar capital flow back to the United States and enter the American capital market?
The influence of capital flow is enormous. First of all, it is bad for the domestic stock market, and the investment in new markets will also be reduced. All the effects are not isolated, but have a chain reaction.