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What does the Fed mean by raising interest rates?
The Fed's interest rate hike means that the US Federal Reserve system, that is, the US central bank, raises the federal funds rate, thus affecting other market interest rates and financial activities. The purpose of raising interest rates by the Federal Reserve is usually to control inflation, maintain the balance and sustainability of economic growth, and maintain its own financial stability. For the Fed to raise interest rates, investors can refer to the following aspects for analysis:

1, the Fed's interest rate hike will lead to the appreciation of the US dollar, which is beneficial to investors holding US dollar assets, because they can enjoy higher yields and additional exchange rate gains. However, for investors who hold assets in other currencies, they may face the risk of exchange rate loss and asset depreciation. Therefore, investors need to adjust their investment portfolio according to their asset structure and risk preference.

2. Raising interest rates by the Federal Reserve will increase borrowing costs, curb consumption and investment demand, and thus slow down economic growth. This is not good for the stock market, because the stock market needs monetary liquidity and growth to support it. At the same time, the Fed's interest rate hike will also lead to changes in investors' risk appetite and affect investors' confidence in high-risk assets such as stocks. Some investors may withdraw from the stock market and invest in low-risk assets such as bank deposits or US debt. Therefore, investors need to pay attention to the trend of the US economy and the Fed's policy expectations to avoid excessive chasing in the stock market.

3. It is unfavorable to the economic growth of emerging markets and developing countries. Fed's interest rate hike will lead to capital outflow from emerging markets and developing countries, leading to the depreciation of their local currencies, increased exchange rate fluctuations and reduced foreign exchange reserves. These countries have to adopt tight monetary policies to prevent excessive currency depreciation and rising inflation, but this will sacrifice economic growth and employment.

4. Global financial risks have increased. The Fed's interest rate hike will increase the volatility and uncertainty of the global financial market and trigger investors' risk aversion. The Fed's interest rate hike will increase the attractiveness of the US dollar and promote the inflow of international capital into the US market. Some financial institutions and enterprises may face problems such as liquidity shortage, credit risk and debt repayment pressure.