Expert: Rising oil prices may cause expectations for US inflation to fall back, the Fed faces challenges

The conflict between the US and Iran has been ongoing for close to a month, with shipping in the Strait of Hormuz continuously disrupted. The global energy supply system has been disrupted, causing international oil prices to soar. Wan Zhe, an economics expert and professor at Beijing Normal University, stated that global inflation is facing a comprehensive rebound, and the rise in oil prices will be transmitted throughout the entire industrial chain. Costs in all industries such as energy, food, transportation, and chemicals will increase significantly, putting more pressure on economies highly dependent on energy imports like Europe, Japan, and India. Although the US is a net exporter of energy, inflation stickiness may become firmly established, and the Fed's monetary policy will face a dilemma. As of now, the average gasoline price in the US has skyrocketed by over 30% in just three weeks. High oil prices will reverse the previous trend of inflation easing and completely change market expectations of interest rate cuts. If the high-interest-rate environment persists, it will directly suppress the US real estate market, corporate financing, stock market valuations, and more. Especially in a year like this, which is a midterm election year in the US, gasoline prices are one of the most sensitive livelihood indicators for American voters. In terms of global economic growth, there will be a slowdown due to high oil prices directly eroding residents' disposable income, squeezing non-energy consumption, and also raising production costs for businesses.