Financial encyclopedia

The Federal Reserve raised interest rates by 1/4% after the meeting, and stated and deleted the wording of continuing to raise interest rates, which meant that the interest rate hike cycle was over.

At the end of each interest rate hike cycle, there will always be some scripts in history, and one article will let you know the changes in the past 30 years.

1. At the end of each interest rate hike cycle, most interest rates remain at a high level for about half a year, and the Fed will start to cut interest rates.

2. When interest rate reduction is started, the rate of interest rate reduction will be faster and more than the rate increase period. For example, after raising interest rates by more than 1% in 1999, interest rates have been reduced by more than 5% since 2001. After raising interest rates by more than 4% in 2004, interest rates were reduced by 5% in 2007. In the 16-year interest rate hike cycle, how much is increased and how much is reduced, because the Federal Reserve reduced the interest rate to zero that year.

3. After the end of the interest rate hike cycle, a catastrophe occurred in a short time. For example, the September 11th incident in 2001, the financial tsunami in 2008 and the COVID-19 pandemic in 19 years.

4. High interest rates will crush emerging and traditional industries. For the last two times, the interest rate reached 5.25 or above, until 2000 and 2007. At that time, the high interest rate triggered the technology bubble and the real estate market explosion respectively, which both triggered the global stock market crash and the financial tsunami.