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The advantages and disadvantages of the Fed’s interest-rate increasing Policy on Aluminum sheet price of China

2015-12-26

At the end of the 2015, the hammer that long times hanging on the World economy finally drops down: The Fed’s has announced to increase the interest-rate. Beijing Dec 17th, the Fed announced to increase the Federal Funds Rate by 0.25 percentage points to the target range 0.25% to 0.5% in their last meeting in 2015. And that is the Fed’s first time increase the funds in the last 10 years, which means the 7 years zero interest rates era has stopped, the Fed has just started a new tightening cycle. As the main currency in the global market, the US dollar strongly influences the global market and Aluminum sheet price of China. The decision the fed makes will directly influence the future of the World Economy and Aluminum sheet price of China without any doubt.

British the Financial Times says that the American’s central bank has taken a landmark step. Then how the fed’s interest-rate rising action influences China’s nonferrous metal market. First and obviously that the stop of the Fed’s zero rate era, shows the world that the America economy has come to its recovery. Under normal circumstances, the adjustment of the interest rate always is an important tool for all countries as the macroeconomic regulation and control. Appropriately raising the interest rates in a rapid developing economy is to reduce inflation, while economic growth drops down the government will the decline the interest-rate to stimulate the economic growth. So, raise interest rates because the economy is good, and there is more money on the market, it is necessary to raise interest rates to prevent inflation. So as to give the market a clear signal to tighten the market. This is the first time the United States after a decade of economic decline in economy, so we see a clearer signal of economic recovery. Minister of Economic Research Department of the China International Economic and Exchange Center Xu Hongcai told the media that, the Fed’s interest-rate increasing action is good news to Aluminum sheet price of China and the world economy.

First, the US economy become better, which means the world's largest economies, indeed warming, which is conducive to China and other countries to increase their exports to the United States. China's exports to the EU, ASEAN and Japan are under greater downward pressure, with the exception of exports to the US increased, it is the proof. Secondly, although the US Nonfarm payrolls and other data performed well and there was a marked improvement in consumer and real estate market, but the basis of the US economic recovery is still not solid yet. The inflation is still at a relatively low standard, so the hike itself is not only reluctantly, bandit is not good to US exports. Hike this "double-edged sword," the pace of the Fed‘s action would certainly be relatively slow and cautious. Thirdly, on China itself, good economic resilience, large room for adjustment, the macro-control tools, the high and stable growth rate, sufficient foreign exchange reserves, these positive factors and the ongoing deepening of reform, "the public business, Peoples innovation "" along the way, "and so untogether they constitute a powerful and to the good fundamentals. The increase of Fed’s interest-rate will take great influence on Aluminum sheet price of China.

So, the US economic recovery could speed up the economic growth of China’s economy, of course, as the economic recovery in the world's first large country's economic growth, non-ferrous metal industry consumer market will undoubtedly been promoted, thus signs of improvement in the global economy will be conducive to the development of China's nonferrous metals industry and Aluminum sheet price of China.

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