In the world of inflation, expectations are important. If you ask most people in the US what they believe inflation is expected to be, they are likely to say around 2-3%…why? Because that is what they have experienced over the past 5-10 years.

A Tale of Two Halves: If we simply evaluate global market returns last year, one might conclude 2016 was a fairly uneventful. Global stocks and bonds finished up 8%, and 4% respectively, which is generally what you’d expect in a typical year. However, if we dive a bit deeper “uneventful” wouldn’t be an appropriate description.