Specifically, the Fed's interest rate hike may lead to a drop in the prices of commodities such as metals and energy. Taking metal commodities as an example, raising interest rates may lead to falling prices of metals such as steel, copper and aluminum. These metals are raw materials for industry and manufacturing. Raising interest rates will increase the financial pressure of these industries, forcing some enterprises to adjust their production capacity, and the market demand for raw materials will drop, leading to a decline in the prices of metal commodities. Energy commodities such as oil and natural gas may be more affected. One of the main reasons for the Fed to raise interest rates is to control inflation, and energy prices, such as oil prices, are the key items of the Fed's concern. Raising interest rates by the Federal Reserve may reduce the purchasing power of enterprises and consumers, and also trigger changes in market sentiment, which will lead to a decline in international oil prices. However, it should be noted that this impact may be short-term and small, and oil prices are also affected by supply and geopolitical situation. If oil-producing countries take the initiative to reduce production capacity, it may offset the impact of the Fed's interest rate hike, leading to the continued rise in oil prices.
It should be noted that in the actual market, the impact of the Fed's interest rate hike on commodities is not necessarily negative. After raising interest rates, the demand for commodities may not necessarily decline, but the economy may still maintain a high growth momentum, thus increasing the demand and price of commodities. In addition, raising interest rates may mean stable economic growth and help commodity prices rise.
In the face of the Fed's interest rate hike, investors should choose appropriate investment strategies according to their own investment objectives and risk tolerance, so as to reduce the potential risks that interest rate hikes may bring and achieve better return on investment. Investors can also achieve hedging and risk hedging through commodity futures trading, and grasp the investment opportunities brought by the Fed's interest rate hike.