Rebirth of the Evil Life

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five minutes!

Only five minutes before the U.S. stock market reopened, a shocking piece of bad news came.

The entire Wall Street, of course, now at JPMorgan Chase, it should be said that the entire JPMorgan Chase was shocked. Everyone was shocked! They all have incredible expressions on their faces!

Lin Feng was also shocked when he heard the news. There are not many things in this world that can shock Lin Feng, but this is definitely one of them. It definitely counts!

Because the Federal Reserve suddenly announced a rate hike! Yes, without any precaution, the Federal Reserve announced a rate hike. Generally speaking, the Fed's interest rate hikes need to be discussed by the Fed's Board of Directors. It can be said that this kind of discussion takes time, and it is not something you can just issue a document and pass a proposal to raise interest rates. And there will be rumors before the interest rate hike.

Because of this, the Fed will also evaluate the market's reaction to see what consequences it will have if it raises or lowers interest rates. After all, this is the most influential bank in the world. It directly affects the operation of the entire United States! Therefore, the Federal Reserve Board of Directors will be particularly cautious.

Moreover, the Federal Reserve, as the central bank of the United States, obtains its power from the U.S. Congress. The central bank, regarded as an independent bank, does not require the approval of the President of the United States or any high-level member of the Legislature for its decisions. It does not receive appropriations from the U.S. Congress, and the terms of its members span multiple presidential and congressional terms. Including its financial stability is guaranteed by its huge profitability, mainly due to its ownership of government bonds. It returns billions of dollars to the government every year.

but! Yes, there is a but! But the Fed is subject to oversight by the U.S. Congress, which regularly monitors its activities and changes its functions by statute. At the same time, the Federal Reserve must work within the overall framework of economic and financial policies established by the government.

It can be said that the Fed is still not the kind of department that wants to do whatever it wants. It is impossible for the Fed to do whatever it wants. Moreover, the Federal Reserve’s unique mechanism makes it impossible to suddenly raise interest rates.

It consists of the Federal Reserve Board in Washington and 12 Federal Reserve Banks located in various regions of the United States. The main monetary policy of the Federal Reserve is jointly formulated by the members of the Federal Reserve Board and the Chairman of the Federal Reserve Bank. To avoid excessive concentration of policy decision-making power in a few regions (such as Washington and New York).

The First Bank and the Second Bank of the United States were eventually forced to close because they were not accepted by the public. One of the important reasons was that both banks were located in Philadelphia in the northeastern United States. Considered by many to primarily serve some wealthy businessmen in the Northeast rather than all Americans. The Federal Reserve took this lesson seriously when it was founded.

In terms of organizational form, the Federal Reserve adopts a dual organizational structure of a federal government agency and a non-profit agency, thus avoiding the complete concentration of monetary policy in the hands of the federal government. One of the original intentions of the Federal Reserve to establish the 12 Federal Reserve Banks as non-profit institutions rather than government agencies is to consider the voices of both the government and the private sector when formulating monetary policy. Although the Federal Reserve in Washington is part of the U.S. federal government. But the 12 Federal Reserve banks are not federal government agencies, but non-profit private organizations. But it needs to be emphasized that the Federal Reserve Bank is different from ordinary private organizations. The Federal Reserve Bank is not for profit and, together with the Federal Reserve Board, assumes the public functions of the central bank of the United States.

It can be said that in this case. When the Federal Reserve announces a rate hike, there must be rumors from the outside world. But what? But there was no news! That’s how the interest rate hike was announced! The interest rate hike was announced without any precaution!

Moreover, the interest rate hike is so huge! Any national bank in the world, whether it raises or lowers interest rates, the range is very small, usually about 0.5%, it may be larger, but it may also be smaller.

But it is definitely within this range. It is absolutely acceptable to everyone.

But this time. But it directly gave everyone a fatal blow. Yes, a fatal blow! A fatal blow that made all stockbrokers feel the end.

5%, the Federal Reserve directly raises interest rates by 5%!

And before this rate hike, what was the Fed's interest rate? 0.09%! Yes, you read that right, the interest rate is 0.09%! This interest rate is almost non-existent. You invest $10,000, and it only gives you $9 in interest a year! Is this called interest? This is not interest at all! With this amount of money, you can even treat it as if it doesn’t exist at all.

And this time. But it is a direct 5% interest rate increase! From the conventional 0.5%, of course, on the Fed's side, it may be less. The interest rate was about 0.25%, which jumped directly to an astonishing 5.09%.

You know, such amazing interest rates are only possible in those third world countries. Why? Because these countries need people's money to develop people's livelihood facilities, and the country needs people's money. When the country cannot print money at will, the country can only raise interest rates. Let people deposit their money in banks and then give it to the country.

However, in developed countries, the country does not need any facilities for people's livelihood. Even if it does exist, it can be solved by local financial allocations, and there is no need to borrow money from ordinary people. What's more, this kind of borrowing money is also illegal. Therefore, interest rates in developed countries are quite low.

And now, the Federal Reserve is completely abnormal! 5.09% interest! With such high interest rates, I believe there will be a lot of hot money deposited in banks. Most of Americans' money is in insurance or the stock market. The money in the insurance cannot be touched. Then you can only withdraw money from the stock market and deposit it in the bank.

So, how does money come from the stock market? Sell ​​stocks! If you don’t sell it, how can you save it? And if you sell stocks, the stock market will plummet!

Plunge! Everyone was shocked at this moment. Originally, they thought that the stock market would rise sharply, especially when Lin Feng created a miracle. Although everyone after getting excited, they realized that there must be something fishy in it, but no one was willing to expose it. Because it’s a beautiful lie that benefits everyone.

But what about the result? As a result, before the market opened, there was an unprecedented interest rate hike!

5%! This is a terrible rhythm! How can the Fed play like this! This is completely shameless behavior! If they are like this, what about Congress? What does Congress say? Moreover, the Fed must come up with a reasonable explanation!

Everyone roars!

What does Congress say? Congress said they were shocked by the incident. But I believe the Fed should have a reasonable explanation. Therefore, they will listen to the Fed's report before making a decision.

All stockbrokers are angry! By the time you finish listening to the report, the stock market has collapsed! What should they do? Selling stocks? (To be continued.)

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