Bond markets in the US are starting to fret about inflation. The market’s expectation for inflation in 2026, as measured by the 5-year inflation swap, reached around 2.4% in early February. To give some context, they fell to lows of around 1.7% during the nadir of the market rout in March last year. The rise in inflation expectations is not just a US affair. In the eurozone, inflation expectations as measured by the five-year, five-year forward, have risen from lows of around 0.9% last year to 1.35%. Interestingly, UK inflation expectations have not moved around significantly, though in absolute terms…

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