Global inflation has a significant impact on financial markets, affecting various assets and investment instruments. With the general rise in prices of goods and services, investors and market analysts must understand the dynamics that inflation produces. First, inflation tends to increase interest rates. Central banks in various countries often respond to inflation by raising interest rates to curb price growth. This increase in interest rates has an impact on the bond market, where bond prices tend to fall when interest rates rise. This makes investors look for alternative assets that offer protection against inflation, such as gold and property. Second, inflation can have a negative effect on stocks. While companies with strong market power can pass cost increases to consumers, many smaller companies will suffer thinner margins. As a result, stocks in certain sectors such as consumer goods and durables may face pressure due to reduced consumer spending. On the other hand, sectors such as energy and raw materials tend to benefit from inflation, as commodity prices usually increase with inflation. Third, global inflation amplifies market volatility. Uncertainty regarding monetary policy and the economic outlook creates fluctuations in stock and bond markets. Investors are becoming more skeptical and tend to make a ‘flight to quality’, turning to safe-haven assets such as government bonds or strong currencies such as the US dollar. This can cause currency exchange rates to fluctuate and affect multinational companies that depend on exports. Furthermore, inflation may affect retail investors, who may be impacted by the rising cost of living. Higher spending reduces purchasing power, which in turn can reduce demand in various sectors of the economy. Some investors may switch to safer and more liquid investment instruments, such as inflation-focused mutual funds or ETFs. And finally, the impact of global inflation is not only felt domestically but also internationally. Rising inflation in one country can impact other countries through international trade. When prices of goods increase, the competitiveness of exports can be affected, prompting countries to reevaluate their trade policies. Overall, the impact of global inflation on financial markets includes changes in interest rates, shifts in industrial sectors, increased market volatility, as well as widespread impacts on economic policy and international trade.