On May 20, 2026, the U.S. Federal Reserve released the minutes of its April monetary policy meeting. The minutes showed that most Fed officials believed that the current high-interest rate policy needs to be maintained for a longer period to effectively curb inflation. If future inflation data continues to be higher than the 2% target level, the Federal Reserve may further raise interest rates. This hawkish signal has led to the almost complete disappearance of market expectations for interest rate cuts in 2026. The 30-year U.S. Treasury yield broke through 5.2%, hitting a 19-year high, and the global financial market sentiment was significantly affected. Higher interest rates will increase the cost of capital, suppress the valuation of equity markets, especially technology and growth stocks, and at the same time support the strength of the U.S. dollar. The Fed’s hawkish shift is mainly due to the recent rebound in global inflationary pressures, driven by rising energy prices caused by the Middle East conflict and strong U.S. consumer demand. Data shows that the U.S. core PCE price index, the Fed’s preferred inflation indicator, rose by 3.2% year-on-year in April, still well above the 2% target, which has become an important reason for the Fed to maintain a hawkish stance. Industry analysts pointed out that the Fed’s policy focus has shifted from “when to cut interest rates” to “whether to raise interest rates again”. In the short term, the Fed is likely to maintain high interest rates, which will bring certain pressure to the global economy and financial markets. Investors need to closely pay attention to subsequent U.S. inflation data and the Fed’s policy signals to adjust their investment strategies in a timely manner. For emerging economies, the surge in U.S. Treasury yields may lead to capital outflows and currency depreciation, bringing certain financial risks.