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<\/figure>\n\n\n\nThe Fed hikes interest rates constantly, which\u00a0has made American mortgage loans, other consumer and commercial loans more and more expensive, and increased the risk of economic recession. At the same time, the increase of lending rate will benefit the bond market, and the capital flowing into the stock market will decrease, which will impact the US stock market and inhibit investment. Up to now, the Fed\u00a0has not made any progress in fighting inflation, but the side effects of interest rate hikes have gradually emerged. “Recession” has become the biggest key word for Wall Street to portray the US\u00a0economy next year. Large banks such as Goldman Sachs, Nomura and UBS have issued warnings. In a report\u00a0of the UBS released on Monday, it\u00a0warned again that the US\u00a0could not avoid a economic hard landing next year. UBS predicted that the real GDP of the US\u00a0would shrink by about 1% next year, while the unemployment rate would reach 5.5% in 2024. Paul Krugman, Nobel laureate in economics, said that the main reason for the growth of the US economy in the third quarter was the narrowing of the trade deficit. He believed that radical interest rate hikes would impact US exports and the real estate market, leading to the decline of the US economy\u00a0eventually. As the appreciation of the US dollar reduces the competitiveness of US exports, and the slowdown of overseas economic growth may weaken the demand for US goods, the impetus for US economic growth will disappear. High interest rates will also increase the cost of mortgage loans, eroding Americans’ financial space and ability to buy houses.<\/p>\n\n\n\n
In retrospect, the cause of this global inflation can be traced back to the international financial crisis in 2008. At that time, the Fed launched the unprecedented quantitative easing. After the outbreak of the COVID-19 in 2020, it implemented the “unlimited” quantitative easing, and the “loose”\u00a0monetary policy, which directly led to today’s inflation in the US. Over the years, the US financial and monetary decision-making authority has become increasingly obsessed with pursuing short-term goals and catering to the short-term interests of election politics. In keeping with the White House political agenda, the Fed has repeatedly underestimated the severity of the inflation and missed the best opportunity to control it. If the Fed\u00a0continue to hike\u00a0interest rates continuously, it may lead to a “economic hard landing” in the US, and the economy\u00a0will\u00a0deeply sink into the mire of\u00a0recession. In addition, with soaring prices, the US\u00a0will once again fall into “stagflation”, which will affect the long-term trend in the next 20 to 30 years. The US\u00a0really needs to make prudent decisions when implementing economic policies.<\/p>\n","protected":false},"excerpt":{"rendered":"
On the 2nd of this month, the Fed raised interest rates […]<\/p>\n","protected":false},"author":3,"featured_media":2095,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[1076,1077,617],"class_list":["post-2094","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-sino-american","tag-interest","tag-rates","tag-us"],"yoast_head":"\n