Research on the Transmission Path of the Fed's Interest Rate Hike to China's Economic Growth Motivation——An Analysis of Different Periods Based on Asset Price Channels
In the post pandemic era,the Federal Reserve has initiated long-term and sustained interest rate hikes,causing a decline in China's asset prices and high interest costs for US dollar bonds,exacerbating downward pressure on the China's economy.This paper examined the transmission paths of the Federal Reserve's interest rate hikes on China's investment,consumption,and foreign trade through asset price channels in the foreign exchange market,housing market,stock market,and bond market during different stages of the economic cycle based on STVAR model.The research results show that the Federal Reserve's interest rate hikes stimu-late China's total export and import growth through the depreciation of the RMB,leading to a decrease in China's current account surplus overall;The Federal Reserve's interest rate hikes push up housing prices in China,which in turn stimulates China's con-sumption growth and drive investment to increase during the expansion periods of China's economy and decrease during the contrac-tion periods of the China's economy;The Federal Reserve's interest rate hikes cause a long-term decline in China's stock prices,leading to a decrease in China's consumption and investment;The Federal Reserve's interest rate hikes suppress China's consump-tion and investment by triggering a decline in bond prices.The research in this paper provides empirical basis and inspiration for the formulation of China's economic stability policy measures under the impact of Federal Reserve's interest rate hikes.
Fed's Interest Rate HikeAsset Price ChannelEconomic CycleEconomic Growth MotivationSTVAR Model
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