Why the Fed should raise interest rates？

The main purpose of the Fed's rate hike is to control inflation and depress consumption.。

Inflation is when the price of goods and services becomes higher.。Some see inflation as a bad thing because the money on hand has depreciated and its purchasing power has been relatively reduced.。But whether accepted or not, the general annual inflation rate of 2-3% is inevitable.。

When interest rates rise, banks will raise interest rates on deposits and loans accordingly, and people will keep their cash in the banks and thus reduce their consumption.。When money flows back to the bank, the amount of money in circulation in the market will fall。Consumers also reduce economic activity, leading to lower prices and thus curbing inflation。

The impact of the US interest rate hike on the stock market

With less money in circulation in the market, investors will have relatively less hot money to put into the stock market, so the stock market could face a wave of declines or a slowdown in gains。

For investors, the chance of losing money on their shares means that their wealth is "shrinking."。

What should investors do?？

While inflation can affect an individual's assets and wealth, it can be resistant to inflation as long as investment decisions are made correctly.。

Generally speaking, real estate, stocks, equity funds and gold are "anti-inflation assets," so even if inflation occurs, it can maintain its value;。

• Continuously invest in productive assets and buy potential companies

• Invest in yourself and improve earning power to increase active income