El Niño could push U.S. inflation up by 1 % in 2027, Fed study warns

A San Francisco Fed study warns that the current strong El Niño could lift U.S. inflation by about one percentage point in 2027. The climate event may also give a short‑term boost to employment. Inflation is already running above the Fed’s 2 % target. That adds extra pressure on the central bank to consider further rate hikes. ## Context El Niño is a recurring warming of Pacific Ocean waters that can affect global weather patterns and commodity prices. Higher prices feed into consumer‑price inflation. The Fed raises interest rates to keep inflation near its 2 % goal.