Chapter 39: Sudden Interest Rate Hike

Judging from the attitude of French President Jacques, he gave Zhou Ming a very good start. However, after Zhou Ming arrived at the Arc de Triomphe and met George Soros, he had to feel the meaning of blessings and disasters going hand in hand. He was still a bit too happy.

According to the normal habits of his classmates in the finance class, they would definitely have come out to greet him when he returned. But this time, when Zhou Ming got off the car at the entrance to Kaixuan Building, only Ye Ning and Li Yang were waiting here, and they were both frowning, looking very anxious. It seemed that something unexpected had happened.

'Teacher, there's been a change in the situation in Mexico. Jolo and the other students are operating the transfer of quantum funds and other funds, so only we are here to welcome you as representatives. We are very sorry!' br Novel/

Ye Ning ran up and apologised directly to Zhou Ming. Zhou Ming was both surprised and unsurprised by her apology. After all, the only thing that could make them so anxious was something going on in Mexico. But The problem is that Zhou Ming remembers that the Mexican economic crisis began in 1994. Before that, although the Mexican economy was not booming, at least nothing bad had happened.

In the face of Zhou Ming's doubts, Ye Ning said to him, 'Teacher, what exactly is the matter? I can't explain it clearly to you in a short time. In short, it's very complicated. Mr. Qiao Luosi also wants to invite you to go up first and make a decision.'

Li Yang echoed Ye Ning's words: 'Yes, teacher, Mr. Qiao Luosi said that this situation is very strange, but one thing is for sure, the situation in Mexico will become even more complicated.'

Zhou Ming knew that the two of them would not joke about something like this if they were not in trouble, so he followed them upstairs. Soon they arrived at the office that Joross had rented here. Before entering the office, office. As soon as Zhou Ming entered the office, he saw a row of computers and telephones. His classmates from the finance class were all sitting in front of the computers, nervously tapping the keyboards and making phone calls, creating a tense atmosphere in the entire office.

In this atmosphere, Zhou Ming also walked lightly, but he was still seen by the sharp-eyed students in front of him.

Without waiting for them to greet him, Zhou Ming first gave them a silent gesture, whispering to them that he would go find Qiao Luosi first to find out what had happened before anything else. A few minutes later, Ming and Caitlin arrived quietly at Joross's office.

Joross was overjoyed to see Ming and jumped up to greet him: 'Mr. Ming, you're finally back! Those French people are a bunch of idiots, they almost ruined everything for us!'

'Let bygones be bygones,' said Zhou Ming, waving his hand. 'But more than that, I want to know what happened in Mexico that made you, Jolo, so nervous.'

After a moment of confusion, he shook his head and replied, 'It's not what happened in Mexico, but what happened at the Federal Reserve. Just half an hour ago, the Fed announced that it would raise the federal funds rate by 15 basis points, or 0.15%.

Although what Joe Ross said sounded complicated, Zhou Ming understood it immediately. Put simply, the Fed had raised interest rates.

The interest rate was raised by 0.15%, which may sound like a small number, but in reality it was already a very high interest rate increase.

After all, the Federal Reserve is the central bank of the United States and is responsible for the overall regulation of the US financial and money markets. Even its interest rate hikes can affect the whole world. his interest rate hike measures must be handled with extreme caution. If it inexplicably increases or decreases by one or even two percentage points, it will be a huge financial turmoil for the United States and the world.

Zhou Ming and George Soros are both involved in finance, so naturally they both understand the significance of the Fed's interest rate hike. To put it bluntly, it is to increase the borrowing costs of commercial banks, forcing them to follow suit and raise interest rates, ultimately achieving the goal of encouraging savings and curbing economic overheating and speculative behaviour.

Now, the Fed's interest rate hike will obviously have a huge impact on Mexico.

'Since Mexico has a policy of pegging to the US dollar, the Fed's sudden announcement of an interest rate hike will inevitably put huge pressure on the depreciation of the Mexican peso,' Qiao Luosi told Zhou Ming.

Zhou Ming nodded in approval of Joe Roth's judgment. After all, they had discussed the situation in Mexico at the beginning. In their judgment, if there is going to be a financial crisis in Mexico in the future, it will be during one of the interest rate hikes by the Federal Reserve. Zhou Ming then asked him, 'So, George, do you think the Mexican peso will depreciate in advance?'

George Shultz shook his head and said, 'If this were in the past, Mr. Zhou Ming, I would definitely tell you that it will not happen, but now, I really dare not draw this conclusion, because this time the Fed's interest rate hike is a bit is a bit strange. Although the Fed's reason for raising interest rates is to regulate the overheated real estate market, in my calculations, the current level of speculation in the US real estate market is not yet at a level that requires the Fed to step in and raise interest rates to regulate it.'

Zhou Ming thought for a moment and then said: 'If it's really hard to understand, then let's put this question aside for now. George, you said in the first place that you would tell me that the Mexican peso would not depreciate. What is your reason?'

'Because because the Mexican economy is still in an upward phase, and Mexico is also a country with a high proportion of state-owned economy. The current interest rate hike of only 15 basis points is still a long way from the upper limit that the Mexican government can control response to the upper limit is still some distance away, and Mexico also has sufficient foreign exchange reserves. Even if there is a crisis now, I believe the Mexican government is also capable of solving it,' said George.

'So So do you think that the Federal Reserve's sudden announcement of an interest rate hike is aimed at the Mexican economy? 'Zhou Ming asked.

Qiao Luo shakes his head: 'I don't know why. I just find it strange, which is why I asked your classmates from the finance course to help transfer all the funds to prepare for an economic crisis that could happen at any time. That's why I didn't go to greet you, and I'm sorry.'

Zhou Ming shakes his hand to tell him that Mexico is the most important thing right now. Zhou Ming also says, 'George, your reaction is very correct. I believe in your judgment, and I also believe that this sudden interest rate hike by the Federal Reserve will definitely not be without reason.'

At this time Chloros frowned and thought for a moment before suddenly saying, 'This happened after you left the UK. Mr. Zhou Ming, do you think the British may have betrayed you?'

In response to this question, Zhou Ming thought carefully before shaking his head and saying, 'It is indeed possible that the British have betrayed me, but the problem is the sudden interest rate hike by the Federal Reserve. This does not seem like a reaction of betrayal, but rather a sign that he wants to take control.'

Hearing Zhou Ming, George suddenly realised what was going on. He said, 'Mr. Ming Zhou, are you saying that after they learned that you were going to short the Mexican peso, they took advantage of their connections at the Fed and acted first? These damned bastards, they really are rascals without a shred of gentlemanly behaviour, scum!'

Zhou Ming said to him with a smile, 'Chloros, don't rush to condemn them. After all, as you yourself said earlier, the Mexican economy is still in an upswing at the moment, and it's not going to collapse so easily, is it? So if they want to strike first, let them test the water first! After they have tested the depth of Mexico, it will be fine for us to enter the market.'

Jolo clapped for Zhou Ming happily: 'Mr Zhou Ming, you are really clever! Yes, let those idiots who don't know what they're talking about go and help us pioneer the way. We'll wait until the perfect time to sell!'

'In that case, In that case, there is no need to rush at all. We should rather buy more Mexican short-term bonds. I remember you telling me before that once the Mexican economy starts to collapse, these short-term bonds will be the easiest place to cause chaos, right?' asked Zhou Ming.

Jero nods eagerly in reply: 'Mr. Zhou Ming, please be assured that nearly half of the funds I am transferring to Mexico will be used to purchase these Mexican short-term bonds, and the rest will be invested in the Mexican stock market.'

'This is the right idea, but the situation in Mexico will be different from that in the UK and France. Financial powers like the UK and France should be much more strongly. Therefore, currency depreciation will drive the growth of their stock markets, but I'm afraid that Mexico's stock market will also fall along with their currency,' Zhou Ming said, 'And apart from the Mexican stock market, I think that once the Mexican economy collapses, it will cause an even greater financial storm throughout Latin America.'

Jol said happily, 'I think it's the butterfly effect in the financial world, except that our butterfly wings are blowing from the north, all the way to the south, in Mexico!'

Meanwhile Meanwhile, at Buckingham Palace in London, Queen Elizabeth is listening to a report from her son, the Prince of Wales.

'Dear Dear Mother, although the Fed has cooperated with our announcement of a rate hike, the Mexican government will use foreign exchange reserves to counter the devaluation pressure caused by the Fed's rate hike, so for the time being, it will not have any effect,' said the old butler.

Hearing these words, Elizabeth sighed and said, 'It seems that we were too rash. Although it is only a Mexico, it is still a bit difficult to completely and independently eat it.'

Then Elizabeth thought for a moment and then said, 'Then please call that Mr. Zhou Ming.'

The Prince of Wales was surprised: 'Is Her Majesty going to give up? According to According to the analysis of the Chancellor of the Exchequer, the current economic situation in Mexico only looks good. If the US Federal Reserve continues to raise interest rates, Mexico will not be able to withstand the pressure of devaluation unless it abandons the policy of pegging to the US dollar. And once Mexico abandons the policy of pegging to the US dollar, it will also lead to a substantial devaluation of the peso.'

Elizabeth still waved her hand and said, 'My child, you must understand that none of what you have said is important, but the problem is that we don't have to do it anymore, unless you don't know what that Zhou Ming did in France.'

The Prince of Wales paused for a moment, and asked incredulously, 'Your Majesty, are you saying that the French will also get involved?'

'Unless Jacques is an idiot, and there is no indication that he is!' said Elisabeth. 'So we'd better leave the puzzle to the Chinese!'