Food inflation is a major issue for central banks considering how to respond to the closure of the Strait of Hormuz, as food prices continue to rise. This poses a significant challenge for central bankers who are dealing with this issue. The S&P GSCI Agriculture Index, which tracks eight agricultural commodities, was down about 1% from a year earlier, despite the S.GSCI Energy Index having risen roughly 40% over the same period. This decoupling between short-term energy prices and agricultural prices reflects expectations of a short-lived Gulf conflict. However, historical patterns suggest that the rise in oil and gas prices should be enough to push agricultural commodities up 12%. This is consistent with “Engel’s Law” where people become wealthier, spending less on eating and drinking as people become richer, and processed foods have reduced raw materials embedded in final products. The European Central Bank President, Christine Lagarde, said she will focus on how long these effects last, and how long they last. Food inflation can return with a vengeance at a time of supply disruptions, leading to food inflation four months after energy price rises peak. If the food and beverage component of the consumer price index rose as much as the energy component, it would have a 10 times greater impact on core inflation, it could have a one off 1.8% monthly increase in food prices, while an 11% energy shock would raise it by 11%.