The Federal Reserve regards inflation as a fierce beast and treats control as its top priority.

Therefore, the Federal Reserve has deployed a full set of combination moves, the most important of which is the price cap order. By capping the export price of Russian crude oil, it suppresses the global crude oil price, which will effectively lower the inflation in the United States.

As a result, the price cap order actually failed.

The price of oil has risen sharply and has now exceeded $80. Once allies, Europe and Saudi Arabia, now seem to have taken a stand against each other.

What else can the United States do?

01, The failure of the price cap order

In recent months, if we look at the year-on-year CPI data of U.S. inflation, it seems to have fallen, but the Federal Reserve is very clear that looking at the month-on-month data, it is still rising, indicating that prices have not been controlled.

According to the Federal Reserve's method of continuously raising interest rates, it will drag the global economy into a recession, which will naturally lead to a significant reduction in demand for crude oil, and the price of oil will fall.

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At the same time, the price cap orders introduced in December last year and February this year will effectively suppress the price of Russian crude oil and crude oil products, which will also lead to a fall in oil prices.

As long as the price of oil falls sharply, the possibility of inflation falling will become greater and greater.For a period, the United States also saw hope, as the WTI crude oil price had fallen to around $60, which was also the restricted price proposed by the U.S. price cap order.

However, it was unexpected that the current WTI crude oil price has already risen to over $82 and has been maintained above $80 for nearly two weeks.

The one who stabbed in the back was none other than the former ally, Saudi Arabia.

02, Saudi Arabia's betrayal

The CEO of JPMorgan Chase stated that the current U.S. economy, affected by inflation, monetary tightening, and other issues, has led to significant risks in the financial system.

In addition to the economic recession in the United States, the real estate market has also faced a crisis.

Middle and low-income earners make up a large part of the U.S. population, and most of the consumer economy is driven by middle and low-income earners. Currently, middle and low-income earners are facing financial crises, which means that the consumer-driven economy will also face the same crisis.

These difficulties have made the Federal Reserve more urgently in need of suppressing inflation.

However, it was unexpected that Saudi Arabia announced independent production cuts just a few days ago, followed by several Middle Eastern oil-producing countries announcing production cuts. It appears to be the individual actions of each oil-producing country, not through OPEC, but it is clear that these actions themselves constitute a tacit understanding among each other.

In fact, although Saudi Arabia and the United States reached an agreement 50 years ago to build the petrodollar system, the honeymoon period is long gone.The United States is importing less and less crude oil from the Middle East, instead becoming a crude oil exporter itself, forming a competitive relationship with the Middle East. In addition, the US dollar also controls the direction of crude oil prices through continuous interest rate hikes and cuts, making countries like Saudi Arabia very uncomfortable.

Therefore, Saudi Arabia's actions are a normal response.

03, Europe realignment

Unexpectedly, even Europe no longer stands on the same side as the United States.

The US is very likely to stop raising interest rates in May, taking advantage of this opportunity, the European Central Bank decided to continue raising interest rates.

In fact, this is Europe's counterattack against the US dollar, because the euro has been suppressed by the US dollar for quite a long time, and now it is just taking advantage of this great opportunity to continue raising interest rates significantly, reversing the interest rate gap with the US dollar and also significantly raising the exchange rate of the euro.

In fact, this is also an attack on the US dollar's exchange rate.

For the United States, the biggest trouble is the significant devaluation of the US dollar, which means that oil prices, calculated in US dollars, have gained significant potential for appreciation.

Even Europe has resolutely launched a counterattack against the US dollar, so no matter from which perspective, the US price limit order hopes to suppress crude oil prices, this intention has completely failed.