How Does the Federal Reserve’s Interest Rate Increase Affect the Local Economy?

Abstract

The interest rate hike has had many implications for the US and other countries such as China and Singapore. The original intent of the interest rate hike was to be able to provide some disincentive to inflation. Many studies have shown that interest rate hikes can dampen inflation to some extent, but this inevitably has a negative impact on employment and investment. Many of these effects also occur in different parts of our daily lives. Against this backdrop, this study examines the effects of interest rate increase on the U.S. domestic economy, including on inflation, finance, employment, and other transactions. Given that the relevant studies still need to be fully developed, this study can complement the relevant academic studies. More importantly, this study can help businesses and public practice by systematically presenting the impact of putting a dollar interest rate hike into practice.