The impact of the Federal Reserve rate hike on global markets

¹ Moscow State Institute of International Relations (University) of the Ministry of Foreign Affairs of the Russian Federation (MGIMO), Moscow, Russian Federation
² Saratov State Technical University Gagarina Yu.A., Saratov, Russian Federation
³ Rostov State University of Economics, Rostov on Don, Russian Federation
⁴ Henan Technical Institute, China

^* Corresponding author: bakulina_an_a@my.mgimo.ru

Abstract

The objective of this study is to determine the degree of influence exerted by the Federal Reserve System (FRS) interest rate hike in the United States on global markets, including the Russian market. To achieve the research objective, both quantitative methods (statistical regression analysis) and qualitative methods (document analysis and expert interviews) were utilized. The findings of the study revealed a significant level of influence from changes in the banking and financial system of the United States on global markets. To mitigate the negative consequences, the creation of an alternative global reserve currency fund is proposed, with the yuan being the most suitable currency for this purpose. The scientific novelty of the research is justified by the fact that economic interdependencies between countries are becoming increasingly interconnected and interdependent. The increase in the FRS interest rate can have a substantial impact on the economic situation in various countries worldwide, including both developing and developed economies. Previous studies on the impact of FRS interest rate hikes on global markets were conducted during different time periods and under various economic conditions. However, in light of recent events such as the COVID-19 pandemic and global trade disputes, changes in market reactions to FRS interest rate hikes are possible.