There’s no escape from inflation as a perfect storm of the ‘Godzilla’ El Niño, AI boom, Trump tariffs, fuel crunch, and Ukraine war keep prices high

Oil prices have retreated as the U.S.-Iran war recedes, despite occasional skirmishes, but inflationary trends will continue to apply pressure from all sides.

That will keep Wall Street on high alert for rate hikes from the Federal Reserve, with policymakers growing impatient after five years of inflation exceeding their 2% target.

By the end of the year, investors see 85% odds that the central bank will raise rates at least once, with a nearly 50% chance that two hikes or more are likely.

Here’s a look at several factors in the inflation outlook.

A major disruption in commodity prices could come from the so-called El Niño weather pattern taking shape this summer. It’s expected to be so strong that some scientists have dubbed it a “super” or “Godzilla” El Niño.

It has historically been associated with heavier rainfall in southern South America, the southern U.S., Central Asia and East Africa, but drier conditions in Australia, northern South America, West Africa, the northern U.S. and Canada, as well as parts of South, South East and East Asia.

Because El Niño has uneven effects, some areas will experience better growing conditions while others will see worse ones. But a note from Capital Economics warned the agricultural........

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