Will the Fed cut interest rates and the virtual currency rise
bitcoin is expected to rise again when the Federal Reserve cuts interest rates again. This is an opportunity for them. Bitcoin will benefit greatly in the short term if the Federal Reserve continues to cut interest rates
however, the U.S. economic system should not be so weak, perhaps these are just a surface , because for the mainstream financial markets, the U.S. dollar, stock market, gold, futures, foreign exchange, bond market, funds and other markets are the focus of big funds. Because the currency circle is still a relatively isolated small market after all, it has no linkage with the traditional economy
The Fed has cut interest rates twice in a row, and the previous decline of the bitcoin may be reversed. They have a chance to start a new round of rise . Although the Fed has plans to cut interest rates, it is also an opportunity for the bitcoin
now many people expect the Federal Reserve to start the next round of easing policy, because the US dollar has not been released for many years , so many financial assets are very looking forward to it, just like bitcoin. Some people say that bitcoin will soon return to the time of US $20000. So the trend of bitcoin is closely related to the trend of the US dollar
the interest rate of the US dollar has been reced, while the interest rate of our country is constantly increasing, and the interest level of our country has been higher than that of the US dollar. Then a large amount of hot money in the international market will convert US dollars into RMB and flow into China in the foreign exchange market. Then, according to the simple relationship between supply and demand. As the demand for RMB increases, the exchange rate will rise, which will further exert pressure on RMB appreciation
the main impact on the stock market is the impact of RMB appreciation on the stock market. Benefiting from the appreciation of RMB, banks and real estate are the main revenue sectors.
If the US Federal Reserve raises interest rates, the US dollar index will step into the appreciation trend, which will attract more domestic and foreign hot money to sell RMB and other emerging economies' assets. When the outflow of hot money becomes a trend, it will have an impact on emerging economies led by China
the increase of interest rate by the Federal Reserve is a signal of monetary tightening, and the Central Bank of China is implementing loose monetary policy. Once the RMB depreciates sharply against the US dollar (China has joined the SDR, and the fluctuation of the central bank's dry frequency exchange rate will decrease), a large amount of funds will flow out of China through different channels, which will not only make the central bank encounter liquidity shortage in monetary policy, It will not only impact China's economy, but also affect China's financial instry P>
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fed raise interest rate effect:
Federal Reserve raise interest rate to some extent, the US dollar will lead to the financial bubble of hot money lending. If the interest rate remains ultra-low for too long, there will eventually be over leveraged lending, which will eventually lead to a substantial correction in the market
this will allow the fed to have sufficient monetary flexibility to respond to different economic situations. In a recession, the Federal Reserve has the ability to relax monetary policy to stimulate the economy. In times of inflation, the Fed has the ability to tighten policy to slow inflation
to protect the status of the US dollar as the world's major reserve currency, most of the currencies are linked to the US dollar. The US interest rate increase will increase the demand for US bonds worldwide, especially at the present stage when the yields of bonds of other countries are declining. Foreign investors have to convert their currencies into US dollars to buy US bonds. The stronger demand for us dollars will make the US dollar stronger
reference source: Network - US Federal Reserve System
reference source: Network - RMB
reference source: Network - US dollar
reference source: Network - People's Bank of China
reference source: Network - Phelps: US Federal Reserve will enter Interest rate increase cycle
the main reason for the Fed's unlimited quantitative easing is that in the real financial system, the lack of US dollar liquidity leads to people selling RMB and buying back US dollars, which leads to the appreciation of US dollar.