Bond funds are less volatile. When investors buy bond funds, it is better to be long-term investors. In the case of bad market conditions, they can consider allocating some bond funds to avoid the risks brought by market conditions.
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The impact of the Fed's interest rate hike:
The Federal Reserve is equivalent to the People's Bank of China in China, which is the central banking system in the United States. The Fed's interest rate hike means that the deposit interest rate in the United States has increased. Because the dollar is an international currency, people will consider putting their deposits in banks to earn interest. Naturally, if the dollar in circulation decreases, the dollar will appreciate and the RMB will depreciate relatively.
The impact of the Fed's interest rate hike on the market and the people is as follows:
1. If the Federal Reserve raises interest rates, the deposits in the bank will increase, so the amount used for market consumption will decrease, which will indirectly lead to a decrease in the sales of China's export trade;
2. After the Fed raises interest rates, the US dollar will appreciate, so other countries' currencies, including RMB, will depreciate in the short term in the money market, which will directly lead to the intensification of capital outflow in China;
3. If the dollar appreciates, the price of commodities denominated in dollars will fall. For example, foreign oil prices will fall, which will indirectly have a negative effect on the adjustment of China oil prices and have to be lowered;
4. In the long run, if the Fed raises interest rates for a period of time and then cuts interest rates, then the RMB will rise against the US dollar, foreign currencies such as RMB will rise, and a large amount of capital will flow into China.
For ordinary people, the Fed's interest rate hike has no direct impact, and because of the value and importance of the RMB in the foreign exchange market, the RMB will not be greatly affected by depreciation, and the country will adjust its macroeconomic policies accordingly, so don't worry.
The impact of the Fed's interest rate hike on the stock market;
1. For the American stock market, raising interest rates means raising interest rates on deposits and loans. After the deposit interest rate is raised, investors are willing to deposit their funds in the bank. However, after the loan interest is raised, it will make it difficult for enterprises to raise funds, leading to a decrease in cash flow, so the capital flowing into the stock market will decrease, which is bad for the stock market.
2. As far as the China stock market is concerned, if all the funds in the US market flow into banks, the funds in the stock market will be reduced, which will lead to a decline in the stock price. The United States is at the center of the global economy, and the decline of US stocks will affect the global stock market.
3. If the interest rate of the Federal Reserve is raised, mainland funds or foreign capital will flow into the US capital market, which will lead to the appreciation of the US dollar and the depreciation of the RMB, which is unfavorable to many enterprises. Especially for foreign trade enterprises, the depreciation of RMB means spending more money on raw materials, which is not conducive to the company's operation.