International Capital and Dynamic Changes in Tesla Stock Price: Evidence from Fed’s Interest Rate Policy

Abstract

Since the establishment of Tesla, it has attracted attention from outside the industry and is outstanding in new energy models, which can be reflected in the volatility of Tesla's stock price. This paper evaluates the main scenarios of Tesla stock prices and the Federal Reserve exchange rate in a global regional environment. This paper established ARMA-GARCH model and VAR model to analyze the correlation, impact, and changes in the value and volatility of these stock prices between the Fed rate hike and Tesla. This paper finds that the Fed's rate hike had a surprising impact on Tesla's stock price, which exploded overnight. From a theoretical point of view, Impact of Fed interest rate hikes on Tesla is going in a negative direction. But looking at the stock market, it can be found that the Fed's rate hike has little impact on Tesla's share price and yield, and it cannot be confirmed with certainty that it has an impact on its net effect. The significance of this study lies in whether investors and the government are overly affected by the environment of Fed rate hikes, but only looking at the impact of Fed rate hikes on Tesla studied in this article, it is minimal.