The purpose of the Fed's interest rate hike seems to be to curb inflation. After all, their inflation rate has reached 8.6%, a record high, while domestic prices have risen relatively, and people's living pressure is much greater than before. However, to curb inflation, we can not only raise interest rates, but also have other ways.
For example, they can suppress oil by expanding production capacity and reducing import tariffs, or they can suppress the oil ruble. At present, they have not done so because the main purpose of raising interest rates is to harvest and destroy other economies, reserve space for the next round of economic recovery and monetary expansion, and at the same time take the opportunity to implement their own related strategies. The boom cycle of capitalism and the financial crisis are their own characteristics. The ability of the United States is that its own monetary policy and financial crisis can affect other economies and grasp the rhythm of the economic cycle, which other economies cannot do.
In short, the Fed actually means cutting leeks all over the world. When the US dollar raises interest rates, people in other countries, especially those with freely convertible foreign exchange, can convert their currencies into US dollars. More people pay interest, and their currencies will depreciate. Then, when they switch back to their local currency after the interest rate hike cycle, they will get a double dividend of interest and exchange rate, which is good for individuals, but it is a disaster for the whole.
When the amount of local currency converted into dollars is large, it directly affects the stability of foreign exchange reserves. When the local currency is continuously converted into US dollars, domestic funds will be tightened, which will lead to asset prices shrinking and exchange rate depreciating, which also makes it easier for international speculators to acquire domestic high-quality assets. After this wave of harvest, there is only one chicken feather left in this place.
In addition, in the case of raising interest rates, money will become more worthless and prices will rise! The dollar is extremely highly leveraged in the financial sector. Raising interest rates can reduce these levers, which in turn can promote the return of offshore dollars. The increase of risk-free interest rate means that the yield of government bonds issued in the future will be higher, which is more conducive to printing money and means a little precise regulation. The impact on A shares will hedge the above shocks, and the RMB will be more relaxed. Then, the pressure of depreciation will increase, which means that money is even less valuable, so prices will definitely rise.
Finally, when raising interest rates, it is easy to have a certain crisis, and we need to be prepared to face it here. We are not afraid of not having enough cash in hand, and at the same time, we must come up with a certain plan to deal with it.