The Potential Relationship Between the Fed's Rate Cut and the Global Economy
Main Article Content
Keywords
U.S. economy, Federal Reserve Board interest rate cuts, Chinese economy, inflation, world economy, Japanese interest rate hikes
Abstract
The recent decision by the Federal Reserve Board to cut interest rates has been hotly debated due to growing uncertainty about the US economy. The article provides an in-depth analysis of the potential risks facing the US economy and discusses the need for the rate cut. Based on this, the project will delve into the combined effects of the Federal Reserve's interest rate cut on the US economy, and discuss the positive role it will play in reducing inflation. Finally, the paper also argues that the Fed's interest rate cut is likely to trigger risks in global financial markets and will slow the recovery of the world economy. Considering the limited impact of the U.S. rate cut on the Chinese economy, it is still needed to continue to pay attention to possible asset price bubbles while remaining vigilant.
References
Barsky, R., & Easton, M. (2021). The global saving glut and the fall in U.S. Real interest rates: A 15-year retrospective. Economic Perspectives, (1), 1-15. https://doi.org/10.21033/EP-2021-1
Berge, T. J., & Cao, G. (2014). Global effects of U.S. Monetary policy: Is unconventional policy different? Econometric Reviews, (01612387), 5-31.
Fernald, J., Hall, R., Stock, J., & Watson, M. (2017). The disappointing recovery of output after 2009 (WORKING PAPER 23543). National Bureau of Economic Research. https://www.nber.org/papers/w23543
Gu, Y. (2020). Can the fed's 'precautionary rate cuts' and 'emergency rate cuts' save the day. Globalisation, (3), 11-22. https://doi.org/10.16845/j.cnki.ccieeqqh.2020.03.002
Ihrig, J., Senyuz, Z., & Weinbach, G. C. (2020). The Fed’s “ample-reserves” approach to implementing monetary policy (FEDS Working Paper No. 2020-22). Board of Governors of the Federal Reserve System. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3879417
Summers, L. H. (2014). U.S. Economic prospects: Secular stagnation, hysteresis, and the zero lower bound. Business Economics, 49(2), 65-73. https://doi.org/10.1057/BE.2014.13
Sun, J. (2017). The fed's interest rate hike and its impact on the global economy. Times Finance, (15), 6-10.
Tan, X. (2016). Negative impacts of the fed's interest rate hike on China's economy and finance and its response. New Horizons, (1), 75-80.
Wang, Q. E. (2017). Exploring the impact of the current fed rate hike on the global economy. Modern Economic Information, (5), 12.
Zhang, Y. (2016). Analysis of the impact of the fed's interest rate hike and coping strategies. Economic Forum, (3), 147-148.
Zhao, S. (2022). How to look at U.S. inflation and economic prospects. International Finance, (10), 33-37. https://doi.org/10.16474/j.cnki.1673-8489.2022.10.001
Article Sidebar
This work is licensed under a Creative Commons Attribution 4.0 International License.