On May 4, local time, the Federal Reserve held a meeting of the Federal Open Market Committee and issued a statement, deciding to raise the benchmark interest rate by 50 basis points.

The boots finally landed! The announcement of this news embodies two meanings:

On the one hand, this is the first time that the Fed has raised interest rates by 50 basis points since 2000, which is also in line with previous market speculation.

On the other hand, it also denies the previous view that the Fed's interest rate hike will reach a radical 75 basis points, and also alleviates the market's concerns about the Fed's hawkish monetary policy stance.

In addition, the Fed also made it clear that the scale of interest rate increase in the next two interest rate meetings will still be 50 basis points.

So, what impact will the interest rate hike have on the current market?

I. Raising interest rates and releasing water

Raising interest rates will have an impact on many fields, such as finance and stock market, but our main collections are energy, food and commodities.

Remember how food and commodity prices were pushed up?

Yes, first of all, the global epidemic broke out, interrupted the supply chain, and the mismatch between supply and demand pushed up the price. However, this push-up is not that big and the time is not that long. The reason for the sharp rise and continuous rise in prices is the financial release of major economies represented by the United States, that is, the currency overshoot.

As we all know, the price fluctuation is influenced by the relationship between supply and demand, but the range and time of its fluctuation are often controlled by capital hot money.

These excessive monetary hot money began to enter the grain and bulk areas for constant speculation, which made inflation constantly high.

Excessive currency does not necessarily cause high inflation, but high inflation must be the result of excessive currency.

As a result, commodity prices began to rise.

Global inflation is high, and America is no exception. In March this year, the inflation rate in the United States has reached 8.5%, a 40-year high.

This forced the US central bank to raise interest rates at the largest rate in 22 years, ending the era of global water release to cope with soaring prices.

Second, energy prices remain high and will continue.

The interest rate hike is to cope with high inflation and soaring prices.

But obviously, in the current global situation, soaring prices are not only the result of currency overspending.

Taking energy as an example, the oil price fluctuation known as the "mother of industry" has been incorporated.

With the outbreak of the conflict between Russia and Ukraine and the intensification of a series of sanctions, since the geopolitical conflict between Russia and Ukraine broke out at the end of February, the global crude oil price has soared to a high of 140 USD/barrel. Although it began to decline gradually in the middle and late March, it has been fluctuating around 100 USD/barrel.

Recently, as the European Union announced a total ban on importing crude oil from Russia within six months, oil prices once again ushered in an increase.

Judging from the global pattern, the production increase expectations of major oil-producing countries are not obvious, which also means that the global oil supply shortage will continue, so oil prices will naturally remain high.

On the other hand, the supply of natural gas seems to be more severe.

Europe tried its best to get rid of Russian natural gas, so it began to look for a large number of substitutes, among which American natural gas exports to Europe hit record highs this year.

Recently, however, the price of natural gas futures in the United States has also jumped to 8. 14 USD/million british thermal unit, which is the highest level since 14.

As the temperature rises and the peak of electricity consumption approaches, the demand for natural gas rises again.

Although the United States is the largest producer of natural gas in the world, due to the lack of adequate pipeline facilities, the growth of natural gas production in the United States has encountered bottlenecks and the transportation capacity is close to the limit.

Third, food prices are expected to rise strongly.

Global food prices, which we are most concerned about, are expected to rise strongly due to various factors.

First of all, as we said before, the fundamental problem of rising food prices is not the absolute "lack of food", but the imbalance between supply and demand caused by the change of supply and demand pattern.

For example, after the outbreak of the Russian-Ukrainian conflict, countries that once relied heavily on Russian-Ukrainian food exports were deeply worried, which triggered the rise of global food protectionism.

Secondly, after the rise in energy and food prices, the global purchasing power of food declined.

For food importing countries, this means that to get as much food as usual, it needs to pay more costs, which invisibly increases the cost.

Finally, the expected reduction of production under the influence of weather, the soaring global planting cost caused by high fertilizer prices and the rising demand for biofuels are all pushing up food prices.

It can be seen that the current high price is no longer the result of simple money overshooting, and there are many complicated and interrelated entanglements behind it. The era of low inflation and low interest rate will be far away.

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