I will explain “Financial and economic events (US Fed tapering, rate hikes, etc.)”.

This article was translated into English by Google Translate by the author who understands only Japanese.

for that reason
“Isn’t this strange?"
I think there are many parts.

Of course, I try to provide meaningful information, but besides that, please use it to enjoy strange English.


※If you want to study Japanese, please read this together with the original article in Japanese.



It’s a recession, it’s a bubble, the central bank has just started something, but there are a lot of financial and economic news and information going on.

Therefore, I would like to ask you one question.

“Do you understand those news, chitin?"


To be honest, I don’t know because it can’t be helped to look good!

“Yeah, inflation, deflation! Quantitative easing, tapering! Rate hikes, rate cuts! I don’t know!"

“FRB? FOMC? What the heck! Why do you bother to use the alphabet!"

“Tell me more to understand! That’s what I end up with !!!!"

I always think like this, do you guys think like this?


Therefore, this time, for people like me

“Financial and economic events"


“I hate it so much that I get hives just by listening to finance!"

I will explain it by chewing it so that even people who say that can understand it.


for that reason,

“If you don’t even know the basics, stop investing and finance right now!"

Those who are familiar with the idea should leave.

For those who are not good at just hearing about finance, including myself, I would like to learn from 1 + 1, so please do not disturb me by doing something insane.

(Actually, there are quite a few people who are familiar with this way of thinking! This is!)


So, by reading this article, even you who are not good at finance like me

◎, You will acquire enough knowledge to read at least financial news and articles.

◎, You will be able to understand how it will affect you when financial news comes out.

◎, now I can use financial and economic terms that I do not understand, and I can feel something cool


Then, the first step to understand the finance and economy, which is still difficult now and is unpleasant just by looking at it!

Let’s move on together!


A story that affects deposits, loans, and salaries

The content of financial and economic reports is basically in terms of impact on us

“A story that affects savings, loans, and salaries"



◎, There are almost no Japanese people who do not deposit and save money.

◎, If you own a house, you have a loan, right?

◎, you work at some workplace and get paid, right?

I think most of the people reading this article fall into one of these.

That means that financial and economic events are related to almost everyone!

Until now

“I’m not good at it, so I don’t have to learn. It doesn’t really matter anyway."

I was running away


Although it was a matter of daring, it was a dangerous place because I refused without even knowing it.

I was the same as you before writing this article, but I understood enough to deliver information to you!

It’s okay for you!

Let’s take this opportunity to go beyond that weakness and accept financial and economic events!


So, 4 pieces of information that you should know if you don’t like financial / economic information

①, What is quantitative easing policy and tapering?

② What is inflation and deflation?

③ What is rate hike / rate cut?

④, Exercise “US Fed announces tapering and rate hike"

(You don’t like it just by looking at the words. Me too!)


By the time you finish reading these, let’s chew as much as you can understand and take a closer look together!



① What is quantitative easing policy and tapering?

<Government pays>

Yes, it’s a difficult word to dislike immediately.

If you suddenly started to explain the mess, you would be disgusted, so I will express it briefly first.

What is the quantitative easing policy?

“Government takes measures against recession by buying government bonds"

What is tapering?

“Reducing the amount of government bonds that the government is buying"



The point is that the country spends a lot of money on us private sector during a recession, which is a quantitative easing policy.

The economy is recovering,

“It looks like you don’t have to spend money on taxes anymore!"

When it becomes, it feels like tapering to stop spending money on the private sector.


Recently, management has deteriorated due to the new corona

“It’s dangerous! It’s dangerous!"

There were many companies that became.

Therefore, in various countries around the world, including Japan, the government paid money to the private sector to take measures.

That’s why you often saw the term quantitative easing policy for a while.


Recently, some countries have begun to gradually recover from the influence of the new corona, so the term tapering may be used more often in the future.


<Impact on investment products>

In addition, this event will be a big event for those who are investing.

If quantitative easing is carried out, a large amount of money guaranteed by the government will flow in.

“Oh, the price will go up! It looks like you should buy it!"

It’s easy to get that atmosphere.


As a result, investors are buying financial products, and it is easy to see the phenomenon that the prices of financial products such as stock prices and virtual currencies rise.

Actually, while there are many people suffering from the recession of the new Corona, on TV

“It was announced that the Japanese government would strengthen its quantitative easing policy."

“The Nikkei average hit a record high! Introducing investors who have built big assets!"

Something like that was being played.



② What is inflation and deflation?

Next is about inflation and deflation, the natural enemy of people who dislike financial and economic news.

As before, I will briefly express what they are.

What is inflation?

“Increasing prices (increasing product prices)"

What is deflation?

“Prices go down (product prices go down)"



It seems difficult to express it in katakana, but it’s actually very simple because it’s just this.

Then, I would like to see how these phenomena will affect our lives.

after all

“Well? What impact do they have on us?"

Is important.


<What is the impact on us when it comes to deflation? >

1) The product becomes easier

2) The income of the shop / company decreases

3) The salary of the employees working there will decrease

4) Save when salary decreases

5) The price will be further reduced as the product will be difficult to sell.

6) The income of shops and companies will decrease further.

Hereafter, the same thing is repeated, and the state in which the person cannot get out of the deflationary spiral is called a deflationary spiral.


From our point of view, it would be nice if the products in the store were cheaper, so at first glance it looks like deflation is good.

However, the fact that the products in the store are cheaper means that the stores and companies that sell the products will lose their income, so I am not happy.


If the income of a shop or company decreases, the salaries of the people working there will decrease.

When the salary decreases

“Let’s save now!"

It will be.

Then, even though it is already on sale at a bargain price, the amount that can be bought will decrease, so the profits of shops and companies will further decrease.

Then, the salary will be even lower …

I’m in a virtuous circle, and I’m in a recession.


that’s why

“Deflation = recession"

I have a strong impression.


<What is the impact on us when it comes to inflation? >

1) The price of the product goes up

2) Income from shops and companies increases

3) The salary of employees working there will increase

4) If your salary increases, you will not save money

5) Further price increases as products will be easier to sell

6) Income of shops and companies will increase further

Repeat the same thing below.

Bubble state (super boom) when the amount of salary increase is too large depending on the degree of price increase

Hyperinflation (economic collapse) if the amount of salary increase is too small compared to the degree of price increase


As you can see, inflation is the opposite of deflation.

There is a problem if both go too far.

“Everything is just right! Balance is important!"

It is that.


The best balance is just right

“2% annual inflation (price increase)"

It is said that.

Since countries around the world are aiming for this number, I think that we will see it frequently in the future.



③ What is rate hike / rate cut?

Well, the difficult term is the last one here!

Let’s do our best to raise and lower interest rates!

What is a rate hike?

“Increasing interest rates at banks, etc."

What is a rate cut?

“Interest rates on banks, etc. will fall"


This is not difficult when you look at it like this, isn’t it?


<Story related to loans and deposits>

This is a term related to loans and deposits.

For example, let’s say you have a loan of 10 million yen to buy a house.

Then, it is not enough to repay 10 million yen, but it is necessary to repay only the amount of interest added while borrowing.


Besides, we are depositing money in the bank, aren’t we?

Then you will get interest.

(It’s so small that many people may not be aware of it.)

That is the image that we are lending money to the bank, so we are getting interest in the meantime.

In other words, you are in the opposite position to when you made a loan.


The central bank, etc. intentionally raised these interest rates.

Lowering is called rate cut.


in short,

“I will raise interest rates!"

If it is reported that

◎, Home loan repayment will increase (except for those who have a contract that does not change)

◎, more interest can be earned from deposits


on the other hand,

“I will cut interest rates!"

If it is reported that

◎, House loan repayment will decrease (except for those with a contract that does not change)

◎, interest earned from deposits will decrease

It’s like that.


<Impact on company / investment>

If you raise the interest rate, the repayment amount will be higher if you make a loan or borrow money.

Therefore, the company will not borrow money.

As a matter of fact, companies cannot take on new businesses or challenges without borrowing money, so it tends to slow down.

for that reason,

“I will raise interest rates!"

When it was reported, investors

“If a company goes into defense, you don’t have to invest forcibly now!"

Therefore, there is a high possibility that stock prices will fall.

If the stock price goes down, the company will lose more money, which is a problem.

In the worst case, there is a risk that the salary of employees will be reduced.


On the other hand, interest rate cuts reduce the amount of repayment of loans and debts.

Therefore, companies will borrow money.

If you can borrow money cheaply, you will start thinking about new businesses and challenges.

for that reason

“I will cut interest rates!"

When it was reported, investors

“Companies will start moving! You have to prepare before the stock price goes up!"

Therefore, there is a high possibility that the stock price will rise.

When the stock price goes up, the company will have more funds, so it can act actively.

Maybe the salary of employees will increase!


Therefore, not only those who are investing, but also office workers who are not investing should pay attention to the terms rate hike and rate cut!



④ Exercise “US Fed announces tapering and rate hike"

By the way, you are already able to understand financial and economic news.

Wouldn’t you like to use the knowledge you have acquired?

So, I will put out the actual news that has been making noise recently as an exercise, so please consider whether you can understand it.

The source of information is from the Financial Times in the United States.

>> Link to Financial Times “FRB Chairman Powell announces rate hike in 2022 after tapering"



According to the article, Fed Chair Powell said at a press conference in September.

“The economy, which had been sluggish due to the pandemic of the new corona, is showing inflation of over 2% annually, and consumption activity is also increasing accordingly."

“It can be judged that the US economy has begun to start normalization."

“Therefore, the quantitative easing policy that was planned to continue until 2023 will taper from around November of this year."

“Furthermore, the timing is undecided, but if necessary, we will consider raising interest rates after that!"

In response to this information, financial prices such as stock prices and virtual currencies, which had been declining due to fears of tapering and rate hikes in early September, showed a rise from a sense of security for the time being.


Well, do you guys understand the meaning of this information?

Before reading this article

“Wow, I don’t know! I don’t feel like reading!"

The information that was said is the same.

If you could understand this even a little, if you could read it even if you couldn’t understand anything, it would be a big growth!

I couldn’t even read it, but now I can.

It ’s wonderful in such a short time! !! !!


<Rough answer>

If you say this event, what the central bank of the United States is saying is

“In the United States, the economy was declining due to the impact of the new corona! That’s why the government was pouring a lot of money into the private sector!"

“But recently, the United States has recovered from the recession of the new Corona! But it’s too early to do this in September !?"

“So, after a short wait-and-see period, if things are still going well, I’ll stop spending taxes on economic measures!"

“If we continue to inject taxes as it is, some people will be in trouble because prices will rise too much, so do so!"

“Additionally, if you raise interest on loans, etc., you may be able to suppress price increases a little! But is it too much to do all at once? So it is undecided to raise interest!"

It’s like that.


About this, investors

“I was wondering if I would stop paying taxes and raise interest on loans, etc. by the end of September."

“But when I open the lid," I wait and see. put off. I won’t do it all at once, and it’s undecided! “

“Good! The Central Bank of America is more cautious than I expected! I’m relieved for the time being! Then, should I buy some stocks again?"

So it seems that the price has begun to rise after showing the behavior of buying financial products again.


So, the point of interest for those who are investing is November, when there will be a concrete announcement about tapering.

In addition, there was such an event that the price was lowered at the same time, so please read it as if you were trying.

>>>What is the “Evergrande” bankruptcy crisis problem in China?




It can be said that financial and economic events affect deposits, loans, and salaries.


On top of that, 3 points plus exercises

①, What is quantitative easing policy and tapering?

“Economic measures taken by the government using taxes and movements to reduce them"

“Affects stock prices, etc."


② What is inflation and deflation?

“Rising prices and falling prices"

“Impact on economy, shopping, salary, etc."


③ What is rate hike / rate cut?

“A story about whether to increase or decrease interest on bank loans, etc."

“Impact on company activities / operations and investment"


④, Exercise “US Fed announces tapering and rate hike"

“Because the economy feels good, I will not put in taxes anymore! But go carefully! “

“I’m growing even if I can read this example! “


With this, you have acquired enough knowledge to read at least financial news and articles.

When financial news came out, we were able to understand how it would affect us.

Because I became able to use financial and economic terms that I didn’t understand before reading the article

“By the way, there seems to be a story about tapering in the United States!"

And so on, you can feel something a little cool!

(If you use it too much, it will be awkward.)









Posted by futa