Why 2 Percent Inflation Is NOT ‘Mission Accomplished’

The biggest misunderstanding in the markets right now is that to keep expected inflation well-anchored at 2 percent, inflation must <i>undershoot</i> 2 percent for some time. This implies that interest rate futures curves are mispriced, and that the probability of a ‘soft landing’ is lower than assumed. Plus: we show that the rally in oil has become fractally fragile, and recommend a tactical underweight.