The goal is to allow market funds to be redeposited into banks, reducing the amount of money circulating in the market and thereby tightening monetary policy.
Higher interest rates mean that the renminbi depreciates, which will lead to a temporary fall in the stock market, but it is not bad news in the long run.
When the Fed raises or cuts interest rates, it does not refer to commercial banks’ lending and deposit rates, but to the federal funds rate, which is the rate at which commercial banks lend to each other.
This interest rate has a significant impact on commercial bank interest rates because surpluses and shortages of reserves have an impact on bank deposits and loans.
Thus, while the federal funds rate is not the deposit and lending rate, it affects the deposit and lending rates.
If the Fed raises interest rates, it will raise the interest rates American savers pay on their deposits.
As a result, international investors prefer to hold dollars and have flocked to the United States.
That’s reflected in — it’s a sign that the dollar has strengthened and appreciated against other currencies, so other currencies have depreciated against the dollar. Fed officials have tempered expectations for a 100 basis point rate hike this month. Biden’s trip to the Middle East yielded little.
Please pay attention to the specific operation, the market is changing rapidly, investment needs to be cautious, the operation strategy is for reference only.
