
🔴 Food inflation is the next major threat to global bonds: A UN index of global food commodities has risen to its highest level since late 2022. Looking ahead, JPMorgan is expecting global food inflation to rise to 5% in H1 2027, up from 2.8% in the same period this year. The risk is being driven by several forces at once, including global crop production disruption, tight fertilizer supplies and shipping disruptions The risk is being driven by several forces at once, including disruptions to global crop production, tight fertilizer supplies and attacks on key shipping routes that are making food and agricultural inputs more expensive to transport. As a result, some investors are buying inflation-linked bonds and reducing exposure to countries most vulnerable to food-price shocks. Meanwhile, global yields have already surged to their highest level since the Great Financial Crisis. After energy battered bond markets this year, food inflation could become the next shock investors should be aware of.
