The Impact of Federal Reserve Interest Rate Changes on the Psychological Account of Chinese Market Investors

In recent years, the Federal Reserve's monetary policy decisions, especially changes in interest rates, have had profound spillover effects on global financial markets. The Chinese capital market also showed some fluctuations during this period. With the development of behavioral finance, the theory of psychological accounts has been proven to play an important role in the capital market. At the same time, psychological accounts influence market decisions by influencing investor psychology, causing changes in the market. Based on this, this article adopts a literature review method and focuses on exploring the impact of changes in the Federal Reserve interest rate on the performance of investors in the Chinese market from the perspective of psychological accounts. In addition, by reviewing existing research findings, this article evaluates the response of Chinese investors to the US interest rate hike, with a focus on how psychological biases such as loss aversion and psychological accounting affect investment decisions. This study examines the results of various studies to understand the broader impact of interest rate changes on the Chinese financial market, with a particular focus on behavioral finance theory. Finally, this article provides recommendations for Chinese investors and offers insights into future research on the intersection of global monetary policy and investor psychology.