**[Federal Reserve Research: Dilemma Weakens Under Oil Price Shocks, Inflation Control Prioritized]** BlockBeats News, June 5 — The latest research from the Boston Federal Reserve indicates that with improvements in energy efficiency and increased domestic crude oil production, the U.S. economy's sensitivity to rising oil prices has significantly decreased. Unlike the oil crisis of the 1970s, today's oil price hikes no longer cause widespread disruptions in the labor market. The additional jobs created by the expansion of the oil and gas industry can partially offset the pressure faced by other sectors, thereby reducing the likelihood of a "high inflation + high unemployment" stagflation scenario caused by high oil prices. However, the report also warns that the cushioning mechanism for employment under oil price shocks has weakened, meaning that the inflationary pressure brought by rising energy prices may be more persistent. The Federal Reserve no longer needs to overly worry about energy price hikes leading to economic recession and should instead focus its policy priorities more on curbing inflation. Currently, the market widely expects the Federal Reserve to keep interest rates unchanged at its June meeting, but some officials have already begun discussing the possibility of rate hikes later this year. Meanwhile, Morgan Stanley believes that the current round of oil price increases is more of a short-term supply disruption and is unlikely to become a core factor driving rate hikes. The institution predicts that U.S. interest rates will likely remain unchanged throughout the year and anticipates the start of a rate-cutting cycle in 2027. However, with geopolitical conflicts driving up energy prices, the market's expectations for the Federal Reserve's policy path have clearly shifted. Federal Reserve officials have recently been sending hawkish signals, emphasizing that if inflation continues to exceed target levels, further tightening of policy cannot be ruled out. (Jin10)