How about a recent "roller coaster" ride in the global economy?
The Fed is like the driver on the most exciting thing in an amusement park, and as soon as you step on the accelerator, the global market has to jump up and down to its beat.
The Fed has been really busy for more than a year, raising interest rates 11 times, which is more frequent than we work overtime.
And guess what? With a cumulative 525 basis point rate hike, doesn't it sound like your heart is a little unbearable?
But don't worry, this prescription is prescribed, and the "monster" of inflation does not seem to have been completely tamed. Although the US CPI has come down from a peak of 9.1%, the 3.1% in November still makes the Fed's small target of 2% seem a bit out of reach.
Let's look farther away,
In Japan, the yen exchange rate has fallen so much that my mother almost doesn't know me, and 130 yen can be exchanged for 1 dollar, which is a new low in 20 years.
Think about it, how many Japanese importers have to cry and faint in the toilet. However, the renminbi is much more stable, and the depreciation for the whole year of 2023 will not even be 5%, which is one of the most stable in the world.
Speaking of which, you may have to ask, isn't this interest rate hike the United States' business, why is the whole world suffering from it?
Hey, it's like you're singing at KTV, and as soon as Mai Ba speaks, where will others have the opportunity to sing. As the world's leader, the US dollar moves, and the currencies, stock markets, and bond markets of other countries have to shake three times.
But then again, it's not all smooth sailing at home.
Although the data shows that economic growth is relatively stable, ordinary people are not so happy.
Prices have risen, the cost of living has gone up, but there is not much money in your pocket. No, a recent survey showed that more than 60 percent of Americans have a negative outlook for the economy, the highest in 17 years.
Going deeper, the U.S. banking sector is starting to feel the pinch.
Some small banks can no longer bear it, why? In the environment of high interest rates, loans cannot be released, but deposits are increasing, and interest expenses are too much.
And America's allies are starting to be a little cautious.
On the European side, although it has been overwhelmed by the Russia-Ukraine conflict, inflation is better controlled than in the United States. In East Asia, the renminbi and the South Korean won are as stable as old dogs, and there is no big mess in Asia's liquidity.
You may be thinking, isn't the United States doing all this work for nothing?
In fact, people also have their own little abacus. The Fed may be thinking that if it pushes harder, it may be able to completely defeat the monster of inflation. Moreover, this is an election year in the United States, and stabilizing the dollar is an important political task.
However, if the dollar index does not rush upwards and falls below 100, it will be really dangerous. As soon as the dollar fell, capital fled, and U.S. stocks fell, the picture was too beautiful for me to watch.
So, the current situation is that the United States may have to grit its teeth and continue to raise interest rates.
Although the risk is not small, it may have to be the road for the sake of long-term economic stability.
Moreover, the United States is not fighting alone, it has reached currency swap agreements with the European Union, Japan, South Korea and other small partners, at least in the short term, there will be no shortage of dollars.