JPMorgan economists have issued a warning that a rapidly intensifying El Niño weather pattern, combined with higher energy prices, could add 0.3 percentage points to global inflation next year.
The bank’s analysis suggests that emerging markets will bear the brunt of this dual shock, facing disproportionate price pressures as climate volatility intersects with energy supply constraints.
The forecast underscores a growing concern among commodity strategists that financial markets are significantly underestimating the impact of intensifying climate volatility across multiple asset classes.
This view aligns with recent warnings from the World Meteorological Organization (WMO), which confirmed that El Niño has developed and is set to intensify rapidly into a strong climate event between July and September.
The agency highlighted that this rapid ocean warming poses significant risks to global supply chains and agricultural output.
For traders and investors, the implication is a potential repricing of inflation expectations in emerging market assets.