Chapter 5273

Five Minutes!

Only five minutes before the U.S. stock market reopened, a super shocking bad news came.

The whole wall street, of course, is now at JPMorgan. It should be said that JPMorgan is shocked. Everyone was shocked! It's all an incredible expression!

When Lin Feng heard the news, he was also surprised. There are not many things that can shock Lin Feng in this world, but this is definitely a thing. Absolutely!

Because the Federal Reserve suddenly announced an interest rate increase! Yes, without any precaution, the Federal Reserve announced an interest rate increase. Generally speaking, interest rate increases by the Federal Reserve need to be discussed through the board of directors of the Federal Reserve. It can be said that this kind of discussion takes time, and you can not pass a proposal to raise interest rates just by releasing a document casually. And there will be news before interest rate increases.

Because of this, the Federal Reserve will also assess the market reaction and see what the consequences will be if interest rates are raised or cut. After all, this is the most influential bank in the world. It directly affects the operation of the whole United States! Therefore, the board of directors of the Federal Reserve will be particularly cautious.

Moreover, as the Central Bank of the United States, the Federal Reserve obtains power from the United States Congress. It is regarded as an independent central bank because its resolutions do not need to be approved by the president or any senior member of the legislature of the United States. It does not accept funding from the U.S. Congress, and its members' terms of office span many presidential and congressional terms. Including its financial independence is guaranteed by its huge profitability, mainly due to its ownership of government bonds. It returns billions of dollars a year to the government.

But! Yes, but! But the Fed is subject to the oversight of Congress, which regularly observes its activities and changes its functions through legislation. At the same time, the Fed must work within the overall framework of economic and financial policies established by the government.

It can be said that the Fed is still not the kind of department that wants to do whatever it wants. It's impossible for the fed to do whatever it wants. Moreover, the unique mechanism of the Federal Reserve makes it impossible to raise interest rates suddenly.

The Federal Reserve Board in Washington and 12 Federal Reserve Banks in various regions of the United States are composed. The main monetary policies of the Federal Reserve are jointly formulated by members of the Federal Reserve Board and the chairman of the Federal Reserve Bank. In order to avoid the policy decision-making power is too concentrated in a few areas (such as Washington and New York).

The first bank and the second bank of the United States were forced to close because they were not accepted by the public. One of the important reasons is that they are both located in Philadelphia in the northeast of the United States. Many people think that they mainly serve some wealthy businessmen in the northeast, not all Americans. The Fed learned this lesson seriously when it was founded.

In terms of organizational form, the Federal Reserve adopts a dual organizational structure of federal government agencies and non-profit organizations, so as to avoid the complete concentration of monetary policy in the hands of the federal government. The original intention of the Federal Reserve to set up 12 Federal Reserve banks as non-profit organizations rather than government organizations is to consider the voices of the government and the private sector when formulating monetary policy. Although the Federal Reserve Board in Washington is part of the federal government of the United States, the 12 Federal Reserve banks are not federal government agencies, but non-profit private organizations. But it should be emphasized that the Federal Reserve Bank is different from the general private organizations. The Federal Reserve Bank is not for profit, but together with the Federal Reserve Board to undertake the public functions of the Central Bank of the United States.

It can be said that in this case, if the Federal Reserve announces an interest rate increase, there must be news from the outside world. But what? But there is no news! So we announced the interest rate increase! Let everyone not a little bit defensive announced the interest rate increase!

Moreover, the interest rate increase is so big! Any national bank in the world, whether it is raising or reducing interest rates, the range is very small, usually about 0.5%. It may be larger, but it may also be smaller, but it is absolutely within this range. It is absolutely acceptable.

But this time, it was a direct fatal blow to everyone. Yes, a fatal blow! Let all stockbrokers feel that the end is coming.

5%, the Federal Reserve directly increases the interest rate by 5%!

What was the Fed's interest rate before this rate increase? 0.09%！ Yes, I'm not wrong. It's the interest rate of 0.09%! This interest rate is almost nonexistent. You put in $10000 and only give you $9 interest a year! Is this interest? It's not interest at all! This money, or even that, you can treat it as if it doesn't exist.

But this time, it is a direct 5% interest rate increase! From the conventional 0.5%, of course, the federal reserve side, may be even less, about 0.25%, directly jumped to the amazing 5.09% amazing interest rate.

You know, such amazing interest rates can only exist in those third world countries. Why? Because these countries need people's money to develop livelihood facilities, and they need people's money. And in the case of not being able to print money at will, the state can only increase the interest rate, so that the people can deposit the money in the bank, and then give it to the state.

However, in developed countries, countries do not need any livelihood facilities. Even if they do, they need local financial allocation to solve the problem. They do not need to borrow money from the common people. What's more, it's illegal to borrow money. Therefore, interest rates in developed countries are quite low.

And now, the Fed is totally perverted! 5.09% interest! With such a high interest rate, I believe there will be a lot of hot money, which will be deposited in the bank. Most of the American money is in insurance or stock market. The money in the insurance can't be moved. Then you can only withdraw money from the stock market and deposit it in the bank.

So, how does the money come from the stock market? Sell stocks! If you don't sell it, how can you save it! And sell stocks, the stock market will plummet!

Crash! Everyone was shocked at this moment. Originally, they thought that the stock market would soar, especially Lin Feng created a miracle. Although everyone was excited, they realized that there must be something fishy in it, but they were not willing to expose it. Because it's a beautiful lie, good for everyone.

But what happened? Results before the opening, ushered in an unprecedented interest rate increase behavior!

5%！ It's a terrible rhythm! How can the Fed play like this! This is totally shameless behavior! What about Congress? What does Congress say! And the Fed must come up with a reasonable explanation!

Everyone roars!

What does Congress say? Congress said they were shocked by the incident. But I believe the Fed should have a reasonable explanation. So they will listen to the Fed's report before making a decision.

All the stockbrokers are angry! When you hear the report, the stock market has collapsed! What do they do? Do you sell stocks?