The Federal Reserve, the full name of the Federal Reserve System, is mainly responsible for maintaining price stability, protecting employment, maintaining financial stability, and implementing monetary policy. In addition, the Fed's decision to raise or cut interest rates has a profound impact on global financial markets, especially the ** market. So let's give you a detailed introduction to the impact of the Fed's interest rate hike on the first day
1. The Federal Reserve raises interest rates
First, the Fed's rate hike refers to raising short-term interest rates, which means an increased opportunity cost of investment**. Because in the fixed income investment variety, the return of ** is relatively low. As a result, interest rate hikes typically cause investors to shift their money from the market to other high-yielding financial products, putting pressure on gold prices.
In addition, the rate hike could also trigger a rise in the value of the US dollar, which would also put pressure on dollar-denominated ***. For non-US investors, a stronger dollar means more local currency to buy**, making ** less attractive.
Second, the Federal Reserve cut interest rates
And the Fed's rate cut means lowering short-term interest rates, which reduces returns on investing in other financial products, making ** attractive again as a safe-haven asset. Because in times of economic uncertainty, investors often look for safe-haven assets to protect their investments.
Similarly, a rate cut could also lead to a depreciation of the US dollar, which is also positive for gold prices. Because for non-US investors, a weaker dollar means that fewer local currencies can be purchased, increasing the attractiveness.
3. The impact of the Fed's interest rate cut and interest rate hike on **
According to the general law of the market, the impact of the Fed's decision to raise or cut interest rates on gold prices is mainly achieved by affecting investors' investment returns on other financial products and the attractiveness of ** as a safe-haven asset. A rate hike usually leads to a gold price**, while a rate cut can lead to a gold price**. However, the relationship between non-farm payrolls data and gold prices is not always negatively correlated, and there are special cases. Using this pattern to determine the trend of gold prices can lead to misjudgments. In order to reduce losses, investors should choose a limit price platform for stop-loss trading. The price limit platform promises no slippage, and strictly follows the settings to trade, reduce the risk of slippage, and control the scope of losses.
The impact of the Fed's interest rate hike on **In addition to paying attention to the Federal Reserve's interest rate policy, it is also necessary to consider many factors including economic data, geopolitical risks, investor psychology, etc., in order to be able to accurately grasp the trend of the market.