Deutsche Bank said that investors may underestimate the final magnitude of the current interest rate hike cycle of major central banks. Macro strategist Henry Allen pointed out that the Federal Reserve, the European Central Bank, and the Bank of Japan have raised interest rates in the past two weeks, while commodity prices have risen and the financial environment is still relaxed, which means that the central bank may need to further tighten its policies. Brent crude oil is currently around $100 per barrel, and the rise in energy prices is not fully reflected in inflation data; at the same time, the S&P 500 index is close to historical highs, and credit spreads are still low. Deutsche Bank pointed out that in market history, it is easier to underestimate the rate hike. In 2022, investors initially expected the Federal Reserve to raise interest rates by about 200 basis points in the first year; in fact, it was more than 400 basis points. However, Deutsche Bank believes that interest rate hikes will not necessarily cause the stock market to fall. Using 1999 as an example, the Federal Reserve raised interest rates by a cumulative total of 175 basis points, and the S&P 500 index still rose nearly 20% throughout the year.

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