Are Investors Underpricing the Risk of Inflation?

The video discusses the underpricing of inflation risks and the trajectory of interest rates. It highlights the global bond markets' realization of inflation risks and the central banks' cautious approach to policy changes. The potential for a taper tantrum similar to 2013 is explored, along with the market's current low yield environment. The narrative has shifted from optimism to skepticism about future rate hikes, with markets doubting central banks' ability to increase rates.

What changes in narrative have occurred regarding central banks' ability to raise interest rates?

How might a slight increase in inflation impact market expectations for interest rate hikes?