If signals from the U.S. bond market prove accurate, the Fed will be successful in getting inflation down to a '2 handle'. Just not its 2% target. Moves in bond yields, implied inflation breakeven rates, and inflation-adjusted 'real' yields suggest investors anticipate the Fed's 'higher for longer' interest rate policy will help lower inflation to around 2.5%. The moves currently underfoot in the bond market are dramatic. But this is not a re-pricing of the Fed's near-term trajectory, rather a repricing of the longer term economic and inflation outlook. Annual consumer price inflation around 2.5% could legitimately ... (full story)