The Fed finally announced a rate hike, which also means that the Fed has entered a rate hike cycle and global assets are also facing reconfiguration. After entering the interest rate hike cycle, crude oil will also face a more severe test. The following three factors are used to analyze the future trend of crude oil. \x0d\ 1。 The Fed will repair its balance sheet and reduce the supply of dollars \x0d\ Throughout the past 30 years, the Fed's decision to raise interest rates was mostly to prevent the economy from overheating and curb inflation. But now the American economy shows no signs of overheating, and the inflation level is still very low. So why did the Fed choose to raise interest rates at this time? In addition to the so-called forward-looking guidance of the Federal Reserve, there is actually a big secret, which is to repair the inflated balance sheet. At present, the Fed's balance sheet has reached $4.5 trillion, compared with $800 billion in 2005. During the crisis, the Federal Reserve released a large amount of liquidity, which led to the expansion of its balance sheet, which also meant that the size of the Fed's liabilities rose sharply, while reducing the circulation efficiency of the US dollar. Therefore, it is imperative to modify the balance sheet. \x0d\ In the minutes of the meeting, the Federal Reserve stated that it would temporarily keep the portfolio of mortgage loans and government bonds unchanged, avoid selling them, and the maturity bonds would continue to be extended. He also said that the scale of asset holdings will not be reduced until the interest rate is "on the right track". At the same time, Yellen said at a news conference that the Fed is studying the long-term balance sheet, and don't expect the Fed to stop reinvesting soon. This also shows that the Fed attaches importance to repairing its balance sheet. If the Fed starts to revise its balance sheet, the most direct result will be a decrease in the supply of dollars, and the global dollar contraction will inevitably lead to an appreciation of the dollar, thus suppressing crude oil. \x0d\ Secondly, the deviation of the Federal Reserve from the monetary policies of other central banks will lead to global economic imbalance. \x0d\ The Federal Reserve announced a rate hike. On the other hand, this means that the Fed is full of confidence in the economic growth of the United States. At this meeting, the Federal Reserve also put forward the economic growth prospects of the United States. \x0d\ But the problem now is that the American economy performs better in the global economy. The economic performance of other economies, such as Europe, Japan and China, is really low, which is why all three economies are expanding their easing policies. If this deviation continues, it will deepen the imbalance of the global economy. The biggest performance is that the tightening of the dollar has led to a large flow of global funds to the United States. \x0d\ This blood-drawing behavior invalidates the monetary policies of these economies, which may lead to further economic decline in these economies. And this global mismatch of funds has caused a great increase in global systemic financial risks. Some economies with single economic structure and weak ability to resist external risks are now on the verge of crisis, such as Brazil, Turkey, Russia and other countries. This potential risk will also put pressure on oil prices. \x0d\ III。 The environment of the crude oil market has changed \x0d\ If we analyze 1999 and the sharp rise of crude oil after the Federal Reserve raised interest rates in 2004, the China factor can be said to have contributed. Especially after China joined WTO, China's position as a global factory was established, and China's demand for crude oil increased greatly. After a long period of low volatility, oil prices have ushered in a rapid rise. But now things have changed. The downward pressure on China's economy has increased, and the global demand for crude oil has weakened. \x0d\ Secondly, in terms of supply. During the financial crisis, the ultra-loose monetary policy of the Federal Reserve also prompted the United States to complete a round of energy technology revolution. The maturity of hydraulic fracturing technology has greatly increased shale oil production and increased global crude oil supply. This also forced the Organization of Petroleum Exporting Countries to continuously increase crude oil production to seize the market share of crude oil, which fundamentally shook the foundation of rising oil prices. \x0d\ Overall, the strong dollar pattern will continue after the Fed enters the interest rate hike cycle in the future. Raising interest rates by the Federal Reserve will also lead other economies into recession and even lead to crisis. Moreover, the global crude oil supply and demand environment has also undergone great changes. Therefore, we believe that the downward pressure on oil prices is still great after the Fed enters the interest rate hike cycle. \x0d\