The writer is co-global head of investment strategy for JPMorgan Private Bank

The risk is known — but under-appreciated. A growing market consensus sees the Federal Reserve continuing to cut rates next year even as growth picks up. Yet many investors shrug off a key embedded risk: cyclical and structural forces could push inflation higher, leading to a rise in US bond yields. Today, rates markets price in a low probability of higher inflation or tighter monetary policy.

This investor complacency could prove to be a costly mistake. Three powerful forces — fiscal stimulus, investment in artificial intelligence and monetary policy easing — look poised to reignite growth across developed markets. But with economies close to full capacity despite some labour market softening, inflationary pressures are building. Investors may need to rethink their portfolio playbook.