What is the significance of the Fed’s rate hike?
There are four meanings of the interest rate increase: 1. the deposit in the bank will increase, so the amount for consumption in the market will naturally decrease, which indirectly leads to the decrease of China’s export trade sales; 2. after the US Federal Reserve raises interest rates, other countries will also face a short-term depreciation, which may lead to China’s capital outflow. 3. If the price rises, the prices of other commodities denominated mainly in US dollars will naturally fall. For example, the price of foreign oil will also fall, which will give a counterforce to the adjustment of China’s oil price. 4. If the Fed raises interest rates for a certain period, it will enter a cycle of cutting interest rates, so the RMB will rise against the US dollar , and the RMB and other foreign currencies will rise.