By Richie Lin.    Photo：Oleksandr Pidvalnyi

For the students majoring in the economy in the universities, they will need to study Macroeconomics and Microeconomics. Macroeconomics include GDP growth rate, CPI (Consumer Price Index), interest rate, etc. Macroeconomics seem far away from our daily life but they actually influence economic decisions of governments, companies and each one of us. Even though CPI of USA in March 2023 was 4.9%, which is the seventh consecutive months declining from the highest 9.1% in June 2022, FED still announced on May 3rd to increase the base point of interest rate and make US Fed Funds Target Rate become between 5.00% and 5.25%. This means FED still think CPI is not under control and CPI will be pushed up once again if companies and consumers are getting easier to borrow money for investment and consumptions. FED had already increased the interest rate level from 0.25% in March 2022 to 5.25% in May 2023 in order to suppress the CPI to the normal 2~3%. This so-called violent lifting of interest rate had forced several banks such as SVB, First Republic and Credit Suisse go bankruptcy or get acquisitioned. Raising the interest rate already reach their target to cool down the economy by restraining the money in the market. People and companies are getting harder and harder to acquire the money for consumptions and expenditures. And those who have mortgages, car loans, credit loans need to pay more each month to the banks because the interest rate has become higher and higher each month. This is what FED wanted to do in order to suppress the inflation before serious inflation really jeopardize the economy. Some analysts even said FED is willing to create an economic recession in order to fight against the inflation. Whether the economic recession will happen or not, there will be not much orders within 2023 because everyone will think more than twice when they decide to buy products. Therefore, high CPI will reduce consumptions of unnecessary goods and at the same time force FED to increase the interest rate level to suppress the overheated economy. Either way, the ocean freight and airfreight market will also remain low level because there will be less and less consumptions and new orders.

FCL market rate reference in week 18:

• Asia main ports to USAWC USD 1700~2000 per 40GP; 
• Asia main ports to USAEC USD 2500~3000 per 40GP; 
• Asia main ports for IPI points of USA is USD 4000~4500 per 40GP.
• Asia main ports to Europe base ports and West Mediterranean: USD 2000~3500 per 40GP.

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