Advances in Economics, Management and Political Sciences
- The Open Access Proceedings Series for Conferences
Proceedings of the 7th International Conference on Economic Management and Green Development
Series Vol. 30 , 10 November 2023
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The Global Effect of Fed Rate Hikes: Stocks, Bonds, and Foreign Exchange Markets
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Abstract
On 23rd March 2023, the Federal Reserve has once again increased its federal funds rate. The policy is published aim for reduce the high inflation rate in the US and prevent once again getting into a recession just like in 2008. This brings both advantages and disadvantages to both the domestic and foreign economies. In this paper, some basic impacts are explained including effects on consumption and investment decisions, stocks and bonds markets, and international relations. As the rise in interest rate increases cost of borrowing and discourages speculation, generally, economic activities are reduced. At the same time, this gives foreign countries heavy pressure by creating outflows of investment funds. Looking forward to the future, it is still possible for the Fed to keep raising its interest rate. To prevent further damages, foreign countries may use expansionary fiscal policy as it can stimulate consumption and investment, and most importantly, bring possibilities of improved economy potential.
Keywords
federal reserve, interest rate, stock market, bond market, exchange rate
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 7th International Conference on Economic Management and Green Development
- ISBN (Print)
- 978-1-83558-081-3
- ISBN (Online)
- 978-1-83558-082-0
- Published Date
- 10 November 2023
- Series
- Advances in Economics, Management and Political Sciences
- ISSN (Print)
- 2754-1169
- ISSN (Online)
- 2754-1177
- DOI
- 10.54254/2754-1169/30/20231461
- Copyright
- 10 November 2023
- 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