Abstract
The announcement that the Federal Reserve may announce its eighth interest rate hike in almost a year on 23 March 2023. The trend of international capital flows to the U.S. has become more pronounced. However, this is a double-edged sword for U.S. multinationals. The entry of international capital into the U.S. may contribute to a more prosperous U.S. financial market. However, at the same time, a higher dollar exchange rate means that multinationals' revenues may fall. This paper, therefore, chooses to analyse Tesla, one of the most representative US multinationals. A VAR and an ARMA-GARCH model are used to analyse Tesla's share price movement and the U.S. dollar index futures price movement. This paper finds a correlation between the U.S. dollar index futures price and Tesla's share price. Based on the results of this paper, investors can adjust their investment decisions in Tesla stock based on the following Federal Reserve policy.
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