Advances in Economics, Management and Political Sciences
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Advances in Economics, Management and Political Sciences
Series Vol. 78 , 18 April 2024
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Impact of the Federal Reserve Interest Rate Hikes on the U.S. Dollar Exchange Rate
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Abstract
After the meeting held on March 15 and 16, 2022, the Federal Reserve announced the beginning of a cycle of rate hikes, keeping the federal funds rate at 0.25-0.50 percent. As of its most recent meeting, held from October 31 to November 1, 2023, the Fed has raised interest rates eleven times, reaching 5.25-5.50 percent. The U.S. dollar exchange rate has fluctuated after interest rate hikes with decades of history. To figure out the impact of the Fed interest rate hikes on the U.S. dollar exchange rate, this paper analyzes based on three parts: the first part studies the interest rate effect, capital flow theory, the sentiment of investors, and stock market; the second part analyzes historical data since 1980 and different points of view; the third part discusses other factors that affect the exchange rate. The research concludes that the Federal Reserve interest rate hikes increase the U.S. dollar exchange rate overall.
Keywords
The Federal Reserve, U.S. Dollar, Interest Rate, Inflation
References
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Data Availability
The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.
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- Volume Title
- Proceedings of the 3rd International Conference on Business and Policy Studies
- ISBN (Print)
- 978-1-83558-379-1
- ISBN (Online)
- 978-1-83558-380-7
- Published Date
- 18 April 2024
- Series
- Advances in Economics, Management and Political Sciences
- ISSN (Print)
- 2754-1169
- ISSN (Online)
- 2754-1177
- DOI
- 10.54254/2754-1169/78/20241636
- Copyright
- 18 April 2024
- Open Access
- This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited