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The Impact of the Fed Rate Cut on the Chinese Economy

Author(s)

Yi Zhang

Affiliation(s)

University of California, Davis, 95616 CA, US

Abstract

As the world's largest economy, the monetary institution of the United States has a great impact on the global financial market, current account and capital account, economic development and other fields. The US interest rate hike will increase the attractiveness of US dollar assets, and the world capital will gather in the US, and the liquidity of various countries will continue to tighten. The Fed's rate cuts will cause dollar assets to become less attractive and capital to flow into other countries and markets. In the past few decades, the US Federal Reserve has influenced the international capital flow through the operation of raising interest rates and lowering interest rates, and many countries, especially emerging markets, have experienced brief economic booms and sharp fluctuations in financial markets. Therefore, the interest rate cut of the Federal Reserve brings opportunities but also some risks, which need to be studied deeply. Therefore, this paper analyzes the impact of the Fed's interest rate cut on China's economy, hoping to provide useful insights for the development of China's monetary system.

Keywords

Cut Interest Rates; Coping Strategy; Risk and Challenge

References

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