Longer-term inflation expectations have remained stable according to the indicators we monitor, such as the measure of households’ longer-term expectations from the Thompson Reuters/University of Michigan survey, the 10-year inflation projections of professional forecasters, and the five-year-forward measure of inflation compensation derived from yields of inflation-protected Treasury securities.
It gradually will be dawning on people that in a world of lower yields on most assets and increasing longevity, they are going to have to work hard at making their assets last – or, simply, work in the more normal sense of that word.