Inflation, Monetary Policy, and Economic Impact: Taking the Federal Reserve's Interest Rate Hike as an Example

Abstract

The Federal Reserves interest rate hike is one of the key topics of the current research. Due to the status of the dollar in the global economy, the Federal Reserve's interest rate hike has a profound impact. Therefore, this article collected and analyzed the data of interest rate increases of the Federal Reserve in the past five years. This article discusses the reasons for inflation, as well as the impact of the Federal Reserve's interest rate hike on the foreign exchange market. This paper found that the Federal Reserves interest rate hike has almost no effect on curbing inflation. As the Federal Reserves keeps raising interest rates, less trust in the world leads to a weaker dollar and slower economic growth. With regard to the Federal Reserve continues to raise interest rates, China should take precautionary measures on the premise of ensuring its own economic development and stability. For investors should be timely attention to the Federal Reserve rate hike frequency and response.