Since this year, energy prices have been an important reason for the pressure on the bond market. Today, investors are worried that the next spike in inflation may come from the food sector. They believe that the impact of the “super El Niño” phenomenon, tight fertilizer supply, shipping attacks, and Europe's record high summer temperatures may drive up the price of staple foods. Even if the Federal Reserve has raised interest rates and vowed to curb inflation, rising food prices may present new challenges to bond portfolios. Asset managers such as Carmignac, Fidelity International, and Troy Asset Management are buying hedging tools or cutting investment exposure to countries likely to be hardest hit. “I think the next round of supply shocks will occur in the food sector,” said Marie-Anne Allier, who Carmignac co-manages €7.6 billion in assets. “I don't think the current market fully reflects this risk, especially since we expect this process to be slow, but it will continue.”

Since this year, energy prices have been an important reason for the pressure on the bond market. Today, investors are worried that the next spike in inflation may come from the food sector. They believe that the impact of the “super El Niño” phenomenon, tight fertilizer supply, shipping attacks, and Europe's record high summer temperatures may drive up the price of staple foods. Even if the Federal Reserve has raised interest rates and vowed to curb inflation, rising food prices may present new challenges to bond portfolios. Asset managers such as Carmignac, Fidelity International, and Troy Asset Management are buying hedging tools or cutting investment exposure to countries likely to be hardest hit. “I think the next round of supply shocks will occur in the food sector,” said Marie-Anne Allier, who Carmignac co-manages €7.6 billion in assets. “I don't think the current market fully reflects this risk, especially since we expect this process to be slow, but it will continue.”