Analysis: The Federal Reserve faces challenges; rising oil prices may dampen expectations of a decline in US inflation.

With the Iraq War nearing its one-month mark, shipping through the Strait of Hormuz remains disrupted, disrupting the global energy supply system and causing international oil prices to soar. Firstly, global inflation faces a full-blown rebound, and rising oil prices will be transmitted along the entire industrial chain. Costs across all sectors, including energy, food, transportation, and chemicals, will surge, with economies heavily reliant on energy imports, such as Europe, Japan, and India, facing even greater pressure. The US, a net energy exporter, may see its inflation stickiness solidify, putting the Federal Reserve's monetary policy in a dilemma. Currently, the average price of gasoline in the US has surged by over 30% in three weeks, directly reversing the previous downward trend in inflation and completely altering market expectations for interest rate cuts. A prolonged high-interest-rate environment will directly suppress the US housing market, corporate financing, and stock market valuations. This is especially true this year, a US midterm election year, where gasoline prices are one of the most sensitive indicators of livelihood for American voters. For global economic growth, this will lead to a slowdown, as high oil prices directly erode disposable income, squeeze non-energy consumption, and also increase production costs for businesses. (Jinshi)