As a result, there has been greater focus on financial market conditions and linkages to understand the impact of international shocks on real economies. More recently, the rapid development of commodities as an asset class has meant policy easing by major central banks can be transmitted through higher commodity prices to the rest of the world.
As easier monetary conditions make funding cheaper and reduce returns on fixed income investments like government bonds, investors may look for higher returns on riskier assets, such as commodities. This could potentially cause a (temporary) divergence between commodity prices and market fundamentals, and has prompted concern about rising inflationary pressures in many countries during recent months.