The Increase of Federal Funds Rate and the QQQ ETF Illiquidity

The modification of the Federal funds rate is crucial for regulating inflation, fostering employment opportunities, and ensuring sustained economic growth. The QQQ ETF is an exchange-traded fund designed to track the NASDAQ 100 index an important stock price barometer in the United States that reflects technology companies' development. As the United States Federal Reserve continues to change the interest rates during this period, whether the QQQ ETF illiquidity of the world's major technology companies will be affected has become increasingly important. This paper selects one important period of the Fed's interest rate increase in succession. It analyzes the trend of the QQQ ETF illiquidity aiming to explore the different impacts of the decrease in the Federal funds rate on the QQQ ETF illiquidity. The research indicated that the elevation of the Federal funds rate substantially impacts the illiquidity of the QQQ ETF. The research results are expected to help investors predict changes in the QQQ ETF during the same period in the future to make more reasonable responses.