The Federal Reserve is raising interest rates again! Has the US dollar exchange rate peaked?

The Federal Reserve announced the latest interest rate decision yesterday, which will increase by another 75 basis points on the basis of last month's interest rate hike! The US benchmark interest rate will be around 2.25%-2.5%

The reason why it is strange is that the consequences of the previous interest rate hikes were a sharp drop in the U.S. stock market and an increase in the U.S. dollar exchange rate, especially the wave of interest rate hikes in early May, which caused billions of market value of Internet companies such as Amazon and Facebook to evaporate overnight. At the same time, the increase in the U.S. dollar directly refreshed the highest level in 20 years, and it remained at around 6.7, which has continued to this day.

So why did the effect of this rate hike turn out to be the opposite? In essence, it is due to the short-lived recovery after the first wave of rate hikes this year, because it was lower than market expectations.

The fundamental purpose of raising interest rates is to curb the excessively high inflation index in the US market. Since the beginning of this year, the US CPI has increased by more than 5% for six consecutive months. The CPI in June announced at the time of this rate hike was as high as 9.1%! It has set a 40-year high. (Add my WeChat ID zyqmda to get high-profit product selection information) It also shows that the Fed’s interest rate hikes in the past few months were not strong enough to stop the momentum of inflation. Therefore, the US market generally believes that the July rate hike will be at least 100 points. As a result, everyone knows that the rate hike is still 75 points. In addition, the Fed also stated at the press conference that another substantial rate hike will depend on changes in US economic data, and may slow down the rate hike at some point in the future.

It is estimated that several waves of interest rate hikes in the first half of the year have seriously damaged the US stock market. Amazon, Apple, Twitter and other technology companies have plummeted since April. The entire US stock market has lost hundreds of billions of dollars, which is a conservative estimate. Wall Street tycoons are already seriously dissatisfied. The Federal Reserve can only stop while it is ahead. Although inflation has not been stopped, at least it has tried its best.

As soon as the above news was released, the share prices of Google and Microsoft rose by 7.7% and 6.7%, leading the technology sector and the entire US stock market to celebrate. The focus of the US stock market will also shift from US inflation pressure to the risk of economic recession, thereby maintaining pressure on the Federal Reserve to raise interest rates to maintain the prosperity of the stock market.

So unless the Fed can send a strong man, this round of interest rate hikes this year is likely to end in vain. This also means that the dollar has little room to rise in the future, and it may even fall as the interest rate hike slows down. According to internal sources, the Fed is likely to stop raising interest rates sharply in September, and instead raise interest rates slightly or even suspend them, and observe the market reaction. So the next 2-3 months or so will be a window period for cross-border sellers.

At this point in time, if you want to survive this cold winter, cross-border sellers must stick together for warmth. In order to help sellers find ways to make money on Amazon in the post-epidemic era, we specially invited Ally, vice president of Tongtuo Technology, Mr. Sun, former CEO of Jiazhilian, and other top sellers to establish a private circle for big sellers. If you meet the following requirements, you can join our circle and exchange experiences with top sellers!

1. To join the group and verify the seller’s identity, the seller must have been in operation for more than 3 years or have a total annual sales of more than 5 million.

2. Sellers joining the group are required to remain active. Sellers who remain inactive for more than 7 days will be automatically kicked out and will no longer be allowed to join the group.

3. Advertising and private adding are prohibited, and members will be kicked out of the group if found.