Proceedings of the 2022 2nd International Conference on Financial Management and Economic Transition (FMET 2022)

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The Fed’s Rate Hikes, USD-RMB Exchange Rate, and Dynamic Changes in Stock Market

Authors
Yuqi Zhao1, *
1Pamplin College of Business, Virginia Polytechnic Institute and State University, Blacksburg, 24061, USA
*Corresponding author. Email: yuqizhao@vt.edu
Corresponding Author
Yuqi Zhao
Available Online 14 December 2022.
DOI
10.2991/978-94-6463-054-1_21How to use a DOI?
Keywords
Inflation; OLS model; interest rate
Abstract

Growing inflation causes US Federal Reverse increasing interest rates, however, it brings a problem for the stock market. This paper focuses on how increasing interest rates affect the Chinese and USA stock market by using VAR and ARMS-GARCH models. This paper selected daily closing prices from Yahoo Finance and Choice, which includes the National Association of Securities Dealers Automated Quotation (Nasdaq), Standard and Poor’s 500 (S&P 500), Dow Jones Industrial Average (DJI), and China Concepts Stock (CCS). When the interest increases, us dollars are appreciated, and the China Yuan (RMB) depreciated. As a result, the United States import from China greater than export, which rises the trade deficit. It causes RMB outflow to the US market. It also harms US companies, which was proven by the model. The author suggests that the government should think about more aspects before making the suggestions. For the Chinese company, it is a great chance for companies whose business is exported to the US. In conclusion, the volatility of US dollars and the RMB exchange rate affect the stock market. US market return rate suffered a great impact, compared with China Concept Stock.

Copyright
© 2023 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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Volume Title
Proceedings of the 2022 2nd International Conference on Financial Management and Economic Transition (FMET 2022)
Series
Advances in Economics, Business and Management Research
Publication Date
14 December 2022
ISBN
10.2991/978-94-6463-054-1_21
ISSN
2352-5428
DOI
10.2991/978-94-6463-054-1_21How to use a DOI?
Copyright
© 2023 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Cite this article

risenwbib
TY  - CONF
AU  - Yuqi Zhao
PY  - 2022
DA  - 2022/12/14
TI  - The Fed’s Rate Hikes, USD-RMB Exchange Rate, and Dynamic Changes in Stock Market
BT  - Proceedings of the 2022 2nd International Conference on Financial Management and Economic Transition (FMET 2022)
PB  - Atlantis Press
SP  - 179
EP  - 192
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-054-1_21
DO  - 10.2991/978-94-6463-054-1_21
ID  - Zhao2022
ER  -