The Impact of the Federal Rate Hike on TSMC: Based on Time Series
DOI:
https://doi.org/10.54097/hbem.v8i.7237Keywords:
Federal Rate Hike, TSMC, Time Series.Abstract
On July 27th 2022, the US Federal Reserve raised interest rates for the fourth time this year. The benchmark interest rate grew to a range of 2.25%-2.5%, making it the most stringent consecutive action since 1990s. Until now, the Fed has raised interest rates 225 basis points this year. During this period, the increase of Federal rate has a great impact on many companies, especially companies depending on the international trade. Taiwan Semiconductor Manufacturing Company (TSMC) is a typical company that relies on the international trade. So, to identify the impact of the Federal rate hike, this paper takes TSMC as example and intercepts its stock data from June 2021. By using Var model and AMAR-GARCH model to analyse the data, this paper study how the TSMC stock has been affected. This paper found that TSMC stock will be affected by the rate hike, but the effect is beneficial, probably because of the company’s advancing place in technology.
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