The Economic Consequence of Feds Monetary Policies in 2022: An Internal Perspectives

Abstract

US interest rate hikes due to COVID-19 and high inflation have affected the country's stock market and the international foreign exchange market. The authors analyze the willingness of U.S. interest rate hikes to cause inflation at the micro level through changes in the amount of money held by residents because of U.S. policies. This paper analyzes the impact of the U.S. interest rate hike by collecting various information on rental housing, GDP and spot exchange rates of countries affected by the U.S. According to the findings of this paper: 1. US interest rate hikes lead to a rise in the amount of currency held by citizens. 2. Interest rate hikes affect the GDP growth rate, and the stock market are positively correlated. 3. US monetary policy affects the world economy. The point of studying the Fed's rate hikes is to analyze the strengths and weaknesses of the policy and to find better ways to control inflation and make the economy stable. According to this paper, the authors propose that the United States should stop raising interest rates at the right time when the inflation rate falls to the right value and let interest rates return to their previous levels, otherwise it will stagnate the country's economic development and cause turmoil in the country's stock and foreign exchange markets.