A lot of people believe that inflation in the U.S. is dead or, if not dead, in a state of suspended animation for the foreseeable future. They could be setting themselves up for an unpleasant surprise.
In official projections and market prices, it’s hard to see any concern about the possibility of excessive inflation. According to the Federal Reserve’s September Summary of Economic Projections, inflation won’t get back to the Fed’s 2% objective until 2023. The yields on different types of Treasury securities suggest that investors expect annual inflation to average 1.9% over the next decade — or an even lower 1.6% by the Fed’s preferred measure.