The economic and financial fallout from the conflict in the Middle East is starting show up in the latest inflation data — and the impact is spilling over to government bond markets too, says Fitch Ratings.
In a report Tuesday, the rating agency said most of the world’s major economies — including the U.S. and the Euro area — have reported inflation data that reflected the impact of the recent rise in global energy prices.
“Prices rose by an average of 0.8% month on month in the major developed economies where data is available, the steepest monthly rise since 2022,” Fitch said.
The average rise in annual rates was 0.3 percentage points, it noted, “with the shock yet to work its way through fully to consumer prices.”
At the same time, “government bond yields have risen across the board,” Fitch said, “as market participants priced in a possible fiscal and monetary response as well as higher inflation.”