Times for the Federal Reserve’s four interest rate hikes in 2019
The first round: the interest rate hike cycle is from 1983.3 to 1984.8, with the benchmark interest rate raised from 8.5% to 11.5%.
The second round: the interest rate hike cycle was from 1988.3 to 1989.5, with the base interest rate raised from 6.5% to 9.8125%.
The third round: the interest rate hike cycle was from 1994.2 to 1995.2, with the base interest rate raised from 3.25% to 6%.
The fourth round: the interest rate hike cycle is from 1999.6 to 2000.5, with the base interest rate raised from 4.75% to 6.5%.
The fifth round of interest rate hikes lasted from 2004.6 to 2006.7, with the benchmark interest rate raised from 1% to 5.25%.
The trend of the U.S. dollar exchange rate in 2019
1. The Federal Reserve Bank of the United States, the Federal Reserve, is the core institution that guides the direction of U.S. dollar policy. The Federal Open Market Committee is mainly responsible for formulating monetary policy, including making eight key interest rate adjustment announcements each year. Its 12 members are composed of government officials and the presidents of the New York and local Federal Reserve Banks.
2. The U.S. Treasury Department is responsible for issuing U.S. government bonds and formulating fiscal budgets. The U.S. Treasury Department has no say in the country's monetary policy, but its comments on the U.S. dollar may have a greater impact on the U.S. dollar exchange rate.
3. The federal funds rate is the most important interest rate indicator in the United States and is also the overnight lending rate among savings institutions. When the Federal Reserve wants to express a clear monetary policy signal to the market, it will announce an interest rate adjustment, causing large fluctuations in the stock, bond and currency markets. In addition, the price of the federal funds rate futures contract directly reflects the market's expectations for that interest rate.
4. The discount rate is the interest rate at which the Federal Reserve provides loans to commercial banks. Although this is a symbolic interest rate indicator, its changes sometimes convey strong policy signals. The discount rate is generally less than the federal funds rate.
5. The 30-year Treasury bill, also known as long-term bond, is the most important indicator for the market to measure inflation. A fall in bond prices due to inflation, i.e. a rise in yields, could weigh on the dollar. Now, with the implementation of the U.S. Treasury Department's "borrow new debt, pay old debt" plan, the 30-year Treasury bill's status as a benchmark has gradually given way to the 10-year Treasury bill.
6. Some economic indicators have different impacts on the US dollar at different stages of the economic cycle, such as labor force reports, consumer price index, gross domestic product, international trade levels, industrial production indicators, etc. When inflation does not pose a threat to the economy, strong economic indicators will support the dollar exchange rate. When the threat of inflation to the economy is obvious, strong economic indicators will suppress the US dollar exchange rate. In addition, financial or political turmoil in emerging markets will also push up the price of U.S. dollar assets. At this time, U.S. dollar assets, as a hedging tool, will indirectly push up the U.S. dollar exchange rate.
7. Eurodollars refer to U.S. dollar deposits deposited in banks outside the United States, and their interest rate spreads can be used as a valuable benchmark for evaluating foreign exchange interest rates. For example, the greater the positive difference between Eurodollar and EuroJennium deposit rates, the more likely it is that the USD/JPY exchange rate will be supported.
8. The three most important stock indexes in the U.S. stock market are: the Dow Jones Industrial Index, the S&P 500 Index and the Nasdaq Index. The Dow Jones Industrial Index has the greatest impact on the U.S. dollar exchange rate and shows a high degree of positive correlation.
Will LPR be changed? There are all kinds of voices. Is there anyone who understands who can tell me?
It is very unobjective to look at things from the perspective of conspiracy theories. If the future interest rate is bullish, choose a fixed interest rate; if the future interest rate is bearish, choose a floating interest rate. From a global perspective, interest rates in most countries are very low. In developed countries, interest rates are generally around 1 or 2, and there are even negative interest rates. After more than 20 years of rapid development, my country's current economic growth is obviously weak and has entered a stable period. In the long run, it is inevitable that interest rates will fall more in line with economic and market needs. Our bank interest rates have a lot of room for downside and should reach the level of developed countries within 10 years. If the current economy is overheating and inflation is severe, interest rates will rise in order to control investment. So is our economy now too hot or too cold? I am responsible for saying that the era of high interest rates is gone forever, and our interest rates will soon hover around 3 for a long time.
To put it simply, if your mortgage interest rate is greater than 4 and the loan term is greater than 10 years, you should not hesitate to switch to floating. This can save tens of thousands in interest. There are no employees within the bank who do not refuse to switch to floating. This is the ultimate answer to this question and does not accept any refutation.
Recently everyone is discussing whether to change or not to change. I have also been paying attention to the comments of various experts. I personally think that if the remaining period is within ten years, the original interest rate can be changed to Lpr. Ten years For the above, choose fixed. My understanding is that Lpr is currently declining. If it rebounds after five years, it will only be adjusted slowly. It will take at most five years to return to the interest rate of your original contract. This change is not big and there is no pressure.
If you choose a fixed loan for more than ten years, you will know exactly how much you will pay every month, and you will not have to worry about the interest rate increasing and becoming uncontrollable. Mine is 30 years, with an interest rate of 5.14%. I chose fixed. I am a novice in finance. I just feel that if I choose fixed, I know how much money I need every month, and I feel at ease. As for the interest rate cut, I will not pay back more. It's a lot, even if it's too much, just work hard and pay it off in one go and you won't have to worry!
There are many opinions on whether the previous mortgage interest rate should be changed to the LPR model, but it is not that mysterious.
First, in the future, the interest rate for home purchase loans will adopt the LPR model. It is based on the five-year loan interest rate, and then adds and subtracts points. Since the five-year loan interest rate is not fixed, it will fluctuate according to various factors, so the amount of each mortgage loan will also change with it. For example, it is 4.8% in the recent period. If it floats to 4.7% in the next period, of course this will The first-term housing loan will be reduced by 0.1 percentage point, and vice versa will be the same if it increases.
Second, the previous mortgage interest rates were based on the central bank’s benchmark interest rate with points or discounts. However, after the previous mortgage interest rates were changed to the LPR model, the value will not change, but the method is different. For example, the previous mortgage interest rates were 4.9%. After changing to LPR mode, it will be 4.8% plus ten basis points, which is 4.9%. It is the same, but it will change according to the fluctuation of the five-year loan interest rate.
Third, why the change needs to be made? Only senior central bankers know. It is estimated that the mortgage interest rate should be separated from the loan interest rate and set up as a separate item to facilitate the central bank's reduction of reserve requirements and interest rates, the economy, etc.
I have a lot of doubts about this regulation of the central bank:
Taking the above loan with a 10% floating rate as an example, the interest rate before conversion is 5.39=4.9 (110%), and the interest rate after conversion 5.39=4.80.59. In other words, if you add points in the future, you will need to add 0.59.
The benchmark point here is 4.8. This is the central bank’s 5-year benchmark interest rate in December 2019. However, when we signed the contract, we signed a loan of more than 5 years. The applicable benchmark interest rate is 4.9, but in the calculation When adding points, we were calculated based on 4.8. What's even more strange is that I had a loan in 2019, which was discounted at 30%. When I wanted to switch to floating points calculation, the base interest rate was calculated directly using the 4.9 discount. , What is the difference between such double standards? In the name of reform, does the central bank still want to chop off some of the flesh of ordinary people like me? [Facepalm] I chose to fix everything in anger. At least I know how much I will have to repay in the future, and the current interest rate is also historically low, which is acceptable to me [呲gna]. I don’t know how many people feel the same way as me. .
Look at the interest rate of your previous loan. If it is too high, it is recommended that you change the market interest rate. If it is relatively low, it is recommended not to change it. If you have a plan to repay it within five years, then change it to the market interest rate
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Middle school philosophy says that we must "see the essence through phenomena." Don't get hung up on appearances such as the economic situation or national policies. Let me analyze the essence for you.
What is the main business of a bank? Collect deposits, extend loans, and eat the interest difference.
Currently, the bank’s demand deposit interest rate is 1.5%, and the fixed deposit interest rate over five years is about 3.5%. Coupled with the bank’s operating costs and profits, your mortgage is also a five-year loan LPR. is 4.8%.
Now assuming that LPR continues to decline and drops below 4%, then according to the current algorithm, the demand deposit interest rate will be close to 0, or even drop below 0. If this happens, how will the bank attract deposits? ? Who will give them money to lend money if they have no deposits?
In the future, the diversified development and competition in the financial industry will inevitably increase banks’ deposit interest rates, which means that banks’ costs will increase. In order to ensure profit margins, it is necessary to increase LPR. Seems very necessary. This does not include the average annual growth rate of M2. In an environment where money is constantly being issued, do you think interest rates will fall?
So you say, is it likely that LPR will rise? Or is it more likely to drop?
The time to modify LPR is getting closer and closer. Whether LPR should be modified or not is my personal opinion: loan interest rates above 5% should be changed to LPR, and loan interest rates below 5% make little difference.
The reasons are as follows:
⒈lpr is the basic loan interest rate, which is very likely to decline in the short and medium term, and its level and inflation are not a simple linkage relationship
Looking at today's developed countries, Japan, Europe and the United States, LPR is very low. On the contrary, countries with poor economies have relatively high LPR. As a country with rapid economic development, our country has a very high probability of LPR falling. The current loan interest rates in developed countries: 0-1% in Europe, 1.5-2.5% in the United States, and 0.5%-1.5% in Japan, are all relatively low and have certain reference significance.
Therefore, as the economy develops and capital flows increase, the probability of lpr going down in the short to medium term is very high.
Of course, many people are worried about inflation, which has always existed over the years. However, we can see that after the introduction of LPR, inflation did not rise within one year, but instead fell. Inflation has persisted over the past few decades, and lending rates have not risen, but have fallen. Therefore, the rise and fall of LPR should not be simply determined by inflation.
⒉ The major domestic policy is "internal circulation". Consumption and loan interest rates will follow the policy downwards, and the probability of banks providing more loans to fund enterprises is also increasing.
The country’s major policy is internal circulation, which requires consumption and encourages production. Only when deposit and loan interest rates fall, can there be more consumption and more companies are willing to lend.
The sharp rise in loan interest rates is an extreme situation that is inconsistent with the development of domestic economic policies. At the same time, your house may not last for 30 years. Moreover, the principal is getting smaller and smaller as you repay it. There is inflation factor, even if there is an increase in a certain period, it will not increase the burden too much.
⒊The higher the LPR, the less money the bank may earn
Many people online claim that the LPR value is set by 18 banks. In order to make more money, they will increase the LPR value. , this view is incorrect.
Because banks earn interest rates, it is enough to earn interest rates stably. If the LPR is increased at will, the higher the LPR, the higher the loan interest rate, which will lead to an increase in mortgage and corporate loan interest rates. The fewer people and companies that borrow from banks, the more banks’ profits will be reduced.
Therefore, banks will not increase LPR at will, it must be determined by the market.
In summary:
If your own interest rate is very low, such as below 5%, I think it is the same no matter what you choose. There is not much difference. You can also choose fixed to lock in a low interest rate.
If the interest rate is higher than 5%, choosing LPR is an excellent choice regardless of the country's future economic development, interest rate development trends in developed countries, or domestic policy tendencies.
The United States has printed so much money this year, and our country will inevitably follow suit. Therefore, inflation will be the mainstream in the future, and banks will inevitably take measures to avoid risks. Five thousand yuan feels a bit much now, but five thousand yuan will not be worth five thousand yuan in ten or twenty years. Maybe ten years from now, five thousand yuan will be the price of a meal, so the bank thinks so too. Why is it now? The five thousand is the same as the five thousand in the future. I clearly have the tools to modify the interest rate, why don’t I use it? The monthly payment is 5,000 now. Do you still want to pay 5,000 in ten years? Think beautifully. .
The bank cannot afford to pay early if it is not profitable, so I choose a fixed interest rate.
If the original mortgage interest rate is between 4.1% and 6.3%, it is recommended to change it!
After changing the interest rate to LPR, the main thing is to see whether the original loan interest rate is favorable enough? After conversion, you can continue to have small fluctuations in monthly payments every year at the preferential interest rate.
Among the current related issues of switching to LPR interest rates, many home buyers are struggling with two points:
The original interest rate is 20% off the 4.9% base rate and 10% off the preferential interest rate. After switching, they are afraid Get taller? Do you think it’s risky so you don’t switch?
In fact, don’t worry. If the original interest rate is a preferential interest rate, after it is converted into an LPR interest rate, the preferential rate will continue to be maintained. Now the LPR benchmark is 4.65%. Assuming that the original preferential interest rate is 4.1%, it will become LPR -55 basis points, the converted first-year interest rate is the same as the original interest rate. The difference is that after the second year, if the LPR benchmark continues to decline, the monthly monthly payment in the future will be tens of yuan less.
If the original mortgage interest rate rises by more than 20% from the 4.9% benchmark, most of these home buyers will be above 5.8%. If the mortgage interest rate exceeds 5.8%, the house price will basically be at a high level when buying a house. The interest rate at the time of signing is also at a high level. Even if it is transferred to the future, it is necessary to look at the fluctuation of the LPR value to determine whether there will be a small reduction in the monthly payment.
There are still many people who think that banks will not take the initiative to offer profits?
Have you ever thought about a problem? Last year, the interest rates for first-time home signings were mostly between 5.6-5.8%. Recently, most of the first-time home signing rates were between 5.1 and 5.3%. The same loan is 500,000, but the difference is Monthly mortgage payments vary from month to month. Do you think home buyers will have fluctuations in their hearts? The current internal circulation strategy launched by the state indirectly reduces expenditures in the housing market. Even if it is reduced by dozens of yuan per month, it will still be a small profit for home buyers with loans.
To sum up, if you can switch to LPR interest rate, try to switch it. The core of the problem is whether the interest rate of the original mortgage you signed is low enough! When the original mortgage interest rate is low, the key is to pay off the loan as early as possible and be debt-free.
How many times has the Federal Reserve raised interest rates in 2019?
As of 2019.08.15, the Federal Reserve has raised interest rates 0 times, cut interest rates once, and kept interest rates unchanged 4 times in 2019. . Data may be updated over time.
Refer to Yingwei Financial Information: Federal Reserve Interest Rate
The Federal Reserve interest rate, the U.S. federal funds rate (Federal funds rate), refers to the interest rate in the U.S. interbank lending market, its most important overnight lending rate. Such changes in interest rates can sensitively reflect the capital surplus and shortage among banks. The Fed's targeting and adjusting of interbank lending rates can directly affect the capital costs of commercial banks, and pass the capital surplus and shortage in the interbank lending market to industrial and commercial enterprises, thereby affecting consumption, Investment and the National Economy.
Mortgage interest rates in 2022
The interest rates for first-time home loans in mainland China are as high as 5.46%, and the interest rates for second-home loans are even as high as 5.83%, ranking "first" among the world's major economies. . The current mortgage interest rate in the United States is only 3.69%, while the UK, France, and Germany in the "Euro Zone" are only around 2%. Japan and South Korea in East Asia are also around 2%, and Hong Kong, China, and Taiwan, China are also around 2%.
Especially since entering 2021, mortgage interest rates have continued to rise in many cities across the country, and the highest mortgage interest rate has even risen to 7.5% for second homes. Mortgage interest rates are rising almost in cities across the country, and no one is spared. Home buyers can only sigh at the "interest rates"!
However, looking at the long-term time and stage in the future, mortgage interest rate cuts are inevitable. Because in the next five years, China's GDP growth rate will be difficult to maintain above 6%, and may drop to between 4% and 5%, and the economic foundation for high interest rates will no longer exist. Therefore, in the next five years, mortgage interest rates will also drop from the current 5%-6% to 4%-5%, and operating loan interest rates may even remain below 4% for a long time.
Deposit interest rates are very likely to "fall" in the next five years. After economic growth slows down, deposit interest rates will definitely fall. Because the rate of return on investment in the entire society has "dropped", no one is willing to invest in business, but is willing to save money to avoid risks, which will inevitably lead to a decline in deposit interest rates.
As the urbanization process slows down, housing demand will decline, and purchasing power will also decline. Real estate policies will shift from "high pressure" to "maintaining stability", and the trend of relaxation will be very obvious.
Under the evolution of the above factors, it is basically impossible for China to maintain "high mortgage interest rates" for a long time, and "cutting interest rates" is the only way out.
Mortgage interest rate refers to a loan obtained from a bank using real estate. The interest on the loan must be paid according to the interest rate specified by the bank.
China's mortgage interest rates are uniformly stipulated by the People's Bank of China, and each commercial bank can float within a certain range when implementing it.
China's mortgage interest rates are not always constant, but change frequently. The form is that interest rates have been rising, so the situation before and after the interest rate increase is often compared.
On June 7, 2012, the central bank issued an urgent document to all commercial banks, requiring commercial banks to maintain the lower limit of the floating range of personal housing loan interest rates at 0.7 times the benchmark interest rate. Commercial banks will implement the new interest rate: if the loan term is more than one year, the loan interest rate will be adjusted once on January 1 every year. During the loan period, if there is no adjustment to the benchmark interest rate, the loan interest rate will not be adjusted. In March 2017, Beijing 16 Bank canceled the 10% discount on the first home loan interest rate and adjusted the first home loan interest rate to 9.5%.
In August 2019, mortgage interest rates increased by 20% in many cities across the country.
On the afternoon of May 20, 2021, the Shenzhen branches of the four major banks of Industry, Agriculture, China and Communications made it clear to Nandu reporters that they had raised mortgage interest rates.