The Federal Reserve raised interest rates for the first time since the beginning of the year! This year's opportunities include...

Early yesterday morning, the Federal Reserve officially announced a 25 basis point interest rate hike , raising the target range of the federal funds rate to between 4.50% and 4.75%!

This is the eighth consecutive rate hike by the Federal Reserve since the start of this round of rate hikes in March last year, with a cumulative rate hike of 450 basis points. After this rate hike, the US benchmark interest rate level has once again hit its highest peak since the 2008 financial crisis.

After the interest rate hike meeting on the 20th of last month, but before the official announcement, some media had already leaked some information in advance, causing the US dollar exchange rate, which had plummeted since the beginning of the year, to recover somewhat.

At the same time, after the official announcement of the interest rate hike yesterday, the three major sectors of the U.S. stock market rose accordingly, and popular technology stocks including Amazon rose by 1% to 12%.

All signs indicate that the Fed's current round of rate hikes is coming to an end, inflation has been brought under control as expected, and there will be no further rate hikes in the future. Without other support, the US dollar exchange rate will continue to fall this year, but the good news is that after inflation in the United States has come down, consumption in various fields has recovered significantly.

Under the influence of multiple rounds of interest rate hikes, the U.S. inflation index in December has seen its biggest drop since last year. The biggest boost to the drop in inflation came from the sharp drop in local gasoline prices. In mid-2022, gasoline terminal prices soared to more than $5 per gallon. The interruption price at the end of December last year had fallen by 9.4% month-on-month and 1.5% year-on-year from a year ago.

The generally high prices of fuel and food have fallen, and American consumers are waiting for consumption opportunities with their money in hand. Preliminary data show that US retail sales are expected to grow by 3% to 8% in January . At the same time, thanks to China's opening up and economic recovery, the stock prices of major retailers and retail brands are recovering.

So don’t just look at the weakness of the US dollar exchange rate. Interest rate hikes and slowing inflation can release more consumer potential, which is definitely a bigger benefit than the small loss of the US dollar. The US consumer market this year is worth looking forward to.

In addition, both the UK and the EU announced interest rate hikes yesterday.

The UK and the EU also raised interest rates by 50BP yesterday, raising the benchmark interest rate from 3.5% to 4%. Like the US, the interest rate level has reached the highest point since the 2008 financial crisis.

European and American countries all started their interest rate hike cycle at about the same time, and the UK has also experienced 10 rounds of interest rate hikes since last year. Although the interest rate hikes in Europe and the UK this month are higher than those in the US, both countries have already revealed that they have abandoned the wording of "strong interest rate hikes" when necessary, which also suggests that the interest rate hike cycle of the two major economies is nearing its end.

In terms of controlling inflation, the UK and the EU are likely to return to normal levels faster than the U.S. The Bank of England announced yesterday that the UK consumer inflation index has peaked, and it is expected that the UK inflation rate will drop to around 4% by the end of this year, with the goal of dropping to 2% in the second quarter of next year to reach normal levels.

Last year's high inflation did have a big impact on the consumer market, and cross-border sellers have also felt the weakness and downturn on the consumer side. So after inflation has been brought under control this year, it is only a matter of time before the consumer market picks up. Everyone should make early plans this year to develop new products or new platforms. Sellers who are watching new platforms such as Walmart, Wayfair, Tik Tok, etc. can come to our cross-border seller exchange group to discuss how to enter the new platform and quickly get started! Scan the code to join the group and seize the New Year's opportunity!