The impact of the Fed's interest rate hike on commodities

The Fed's interest rate hike will make commodities fall. Fed's interest rate hike means that global money will flow into the United States in large quantities. Investors will invest in the American market in various ways, which will lead to the rise of the US dollar, and the commodities, precious metals and foreign exchange markets denominated in US dollars will all fall. Investors should note that the Fed's interest rate hike is only one of the factors that affect the rise and fall of commodities, and the rise and fall of commodities is also affected by factors such as supply and demand and the amount of funds.

1, the FOMC policy meeting of the Federal Reserve ended, and its contents were basically in line with expectations. The current serious inflation problem has put the Fed under great pressure, and it has to take more radical measures to reduce the money supply and stop releasing water. Raising interest rates is the best and fastest way at present. Although raising interest rates is a powerful medicine with extremely strong side effects, the United States has to drink it. If it doesn't drink medicine, it will be terminally ill. In the later stage, even God can't save him.

As we expected, the employment problem is still the most important factor for the Fed to decide to raise interest rates. Although the Fed claimed in the press conference that with the progress of vaccination and strong policy support, the economic activities and employment indicators in the United States have continued to increase, employment has steadily increased, and the unemployment rate has dropped sharply, in the policy meeting, the Fed admitted that the current labor participation rate in the United States is "disappointing", which means that the Fed predicted that the market is close to "full employment", and all those who can work are basically employed, while those who can't work are employed.

If the job market cannot be further improved, it means that there is no way to solve the supply chain problem in the United States at present, and the shortage of domestic labor force is inevitable. At present, the United States has the dual factors of epidemic prevention and control and social exclusion, and it is almost suicide to rely on immigrants to increase the labor force politically. Therefore, American labor policy has to shift from domestic protectionism to globalism again.

The fundamental change of this policy also determines the monetary policy of the United States. If the United States wants to protect its own employment, it must implement a loose monetary policy, so that enterprises and families can get as low-cost funds as possible, and the whole world will pay the price of inflation in Qualcomm. But now the United States can't transfer the main inflationary pressure to other parts of the world, and its productivity is still insufficient after spending a lot of money, so the United States must rely on the international market. In order to win the trust of the international market, the United States must assume the responsibility of stabilizing the value of the dollar, so raising interest rates is a necessary means, otherwise the weak dollar will not be conducive to US imports and will cause greater losses.