The Federal Open Market Committee of the Federal Reserve announced on January 30 that it would keep the federal funds rate between 2.25% and 2.5%. The Federal Reserve said it would ” assess the future policy direction more patiently” and deleted the phrase ” continue to raise interest rates gradually” from the statement of the meeting, saying ” keep sufficient reserve assets and use all policies including the balance sheet when necessary”. This shows that the Federal Reserve is more dovish in raising interest rates and shrinking its table.
The Federal Reserve has raised interest rates nine times since it started raising interest rates in December 2015. The rise in US dollar interest rates has led to the repricing of global assets and a large number of US dollars are beginning to flow back to the US market. During this period, the U.S. government also implemented a large-scale tax reduction policy for enterprises and individuals, improving the profit-making environment for enterprises. The outflow of capital has triggered sharp fluctuations in asset prices in emerging markets including China, and the A – share market has also experienced a revaluation of US dollar return.