U.S. Interest Rate Hike and Cut Cycle: How It Affects Global Liquidity and Asset Prices

LiquidatedAgain · 2026-01-30T05:15:26+00:00

The US interest rate hikes and cuts, which seem like simple monetary policies, actually influence global financial liquidity. The Federal Reserve operates independently and, due to the dominance of the US dollar, becomes a global financial decision-maker. When interest rates are raised, liquidity tightens, stock markets plummet, and global asset prices decline; when interest rates are cut, liquidity is abundant, and asset prices soar. These mechanisms cycle repeatedly, profoundly affecting the global economy.

LiquidatedAgain

2026-01-30 05:15:26

Abstract generation in progress

The US rate hike and cut may seem like just tools of monetary policy, but in reality, they directly control the valve of global financial liquidity. When interest rates rise, funds tighten and a bear market arrives; when rates fall, liquidity floods in and asset prices soar. This logic sounds simple, but its operational mechanism is definitely worth deep understanding because it determines how the crypto market, US stocks, and even global asset prices move.

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