The Impact of the US Federal Reserve's Interest Rate Hikes on Various Industry Stock Markets in China: An Empirical Analysis Based on Event Study Methodology

This study investigates the impacts of the Federal Reserve's rate hikes on various sectors, primarily focusing on the industrial, manufacturing, financial, scientific research, coal, and petroleum sectors. The scope of the study covers ten rate hike events by the Federal Reserve from March 2022 to May 2023. This aids in effectively determining the market's response to multiple rate increases. The primary research methodology adopted is the Cumulative Abnormal Return (CAR) method, which measures the effect of the Fed's rate hikes on various sectors by calculating the accumulated difference between actual returns and expected returns of stocks or markets within a specific time window. Additionally, hypothesis testing is employed to assess whether these abnormal returns significantly deviate from expected values, thus determining whether the market had anticipated the Federal Reserve's rate hikes or was actually influenced by them. The findings indicate that the rate hikes of the Federal Reserve had varying impacts on the stock markets of all six industries, and anticipatory behavior was observed in each of these industries. Among them, the industrial, manufacturing, and financial sectors displayed stronger sensitivity to the Federal Reserve's rate hikes.