The federal reserve

The federal reserve

What is the Federal Reserve

In what year was the Federal Reserve established? Where is the headquarters located?

What is the Federal Reserve?

What will be the impact of a Fed rate hike?

The impact of the interest rate hike by the Federal Reserve is as follows: 1. When the interest rate hike by the Federal Reserve increases, deposit in the bank will increase, so the amount spent on consumption in the market will decrease, which indirectly leads to a decrease in the sales volume of our export trade; 2. 2. The appreciation of the dollar after the Federal Reserve raises interest rates, then currencies of other countries in the currency market, including RMB, will have a short-term depreciation. The depreciation of RMB will directly lead to the intensification of Chinese capital outflow; 3. The appreciation of the US dollar will lead to a decline in the price of commodities denominated in US dollars. For example, the price of foreign oil will be lower, which will indirectly exert a counterforce to the adjustment of China's oil price and have to be lowered: 4. In the long run, if the interest rate hike of the Federal Reserve is followed by a period of interest rate cut, then the RMB will rise against the US dollar, the RMB and other equivalent foreign currencies will rise, and a large amount of capital will flow into China. Huatai Securities one-stop wealth management platform - "Happy Wealth Tong" can understand the industry information and stock market trends. Huatai Securities, considerate butler, what you want is here, quick click the picture below to join us

The impact of the interest rate hike by the Federal Reserve is as follows: 1. When the interest rate hike by the Federal Reserve increases, deposit in the bank will increase, so the amount spent on consumption in the market will decrease, which indirectly leads to a decrease in the sales volume of our export trade; 2. 2. The appreciation of the dollar after the Federal Reserve raises interest rates, then currencies of other countries in the currency market, including RMB, will have a short-term depreciation. The depreciation of RMB will directly lead to the intensification of Chinese capital outflow; 3. The appreciation of the US dollar will lead to a decline in the price of commodities denominated in US dollars. For example, the price of foreign oil will be lower, which will indirectly exert a counterforce to the adjustment of China's oil price and have to be lowered: 4. In the long run, if the interest rate hike of the Federal Reserve is followed by a period of interest rate cut, then the RMB will rise against the US dollar, the RMB and other equivalent foreign currencies will rise, and a large amount of capital will flow into China. Huatai Securities one-stop wealth management platform - "Happy Wealth Tong" can understand the industry information and stock market trends. Huatai Securities, considerate butler, what you want is here, quick click the picture below to join us

The Fed lost 2.2 trillion yuan in the first quarter? Why does the Fed lose money?

The Fed's main job is to unwind and unwind Treasury bonds, and by doing so, regulate interest rates in the United States.

Basically, the Fed only has two things, one is dollars, the other is Treasuries. The Fed's job is to go back and forth between the dollar and the Treasury: when there are more dollars in the market, it has to sell the Treasury and get the extra dollars back. When there are fewer dollars in the market, he will use his dollars to buy a large amount of Treasury bonds from the market, and by buying a large amount of Treasury bonds, he will release dollars into the market.

The simplest way to think about it is that the Fed will always hold Treasuries, but the price of Treasuries fluctuates. When Treasury prices fall and the Fed holds a lot of them, then of course the Fed will take a paper loss.

The problem works the same way with stocks. For example, if you own a lot of stocks, but you don't sell them before their price drops, your wealth will of course shrink. But these are just paper losses, because what goes down, goes up, and as long as you hold on to your stock, when the price goes up again, your money will come back.

Thus, there is no need to make a fuss about the paper loss of the Federal Reserve. It is the manipulator of the interest rate in the United States itself. As long as the Federal Reserve wants to earn money back, it is a matter of minutes, and the key is to see whether he is willing to.

The principle is as follows:

1. When interest rates are high in the United States, people who put their money in the bank will earn more than buying Treasury bonds, so they put their money in the bank, and the price of Treasury bonds will fall due to lack of enthusiasm among people to invest.

2. Because the US economy is so bad, the Federal Reserve needs to keep pumping money into the market, so at this time, the Federal Reserve keeps buying US bonds or holding a large amount of US bonds.

The combination of these two factors is the main reason for the Fed's paper losses:

On the one hand, the Federal Reserve wants to raise interest rates in the United States to fight inflation (to get people with more money to put it in the bank).

On the other hand, he had to keep pumping dollars into the market to ease America's debt crisis.