Markets

Jennifer Ryan is a Bloomberg Gadfly editor. She previously reported on economics and corporate finance for Bloomberg News in London and New York.

Elaine He oversees Bloomberg Gadfly's data visualization work in Europe and also pursues her own columns combining business and markets coverage. Before joining Bloomberg, she was a graphics editor at the Wall Street Journal and the New York Times.

It's finally coming. Inflation. President-Elect Donald Trump's promised a whole lot of infrastructure spending, raising the prospects for a great slug of price pressure the likes of which we haven't seen in years.

Analysts' forecasts and financial markets show a dramatic shift in view on the outlook for inflation. These charts show some metrics worth watching.

Investors have raised bets on a price pickup.

Inflation's for Real. No, Really.
A year-end pickup in five-year, five-year forward inflation-swap rates shows investors are expecting faster price gains
Source: Bloomberg
Change from start date

And economists see big things happening in 2017 in the U.S. and U.K.

20161221_inflation_cpi

The jump in U.S. Treasury yields tells the same story.

20161221_inflation_yieldcurve

It looks like the Great Rotation out of fixed income is really happening. The key for investors will be whether any surge in growth is enough to sustain a fire under prices.

Next year will start with a lot of people positioned pretty much the same way. What could possibly go wrong?

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the authors of this story:
Jennifer Ryan in London at jryan13@bloomberg.net
Elaine He in London at ehe36@bloomberg.net

To contact the editor responsible for this story:
Edward Evans at eevans3@bloomberg.net