Via Boomberg- http://mobile.bloomberg.com/news/2012-11-01/pimco-seeks-protection-from-fed-s-inflation-in-australia-u-s-.html
“Central banks have implemented increasingly far-reaching policy measures and they are more willing to take inflation risk as a trade-off for growth and employment,” Michael Althof, a senior portfolio manager in Munich, said in a phone interview. “Index-linked bonds are good assets to have, as longer-term we think the pressure for higher inflation is there.”
“We expect inflation expectations in the U.S. to increase over time because of the Fed’s policy,” said Althof. The near- term “part of the market tends to react more to oil, food prices and currency risks. Further out, they react more to expectation and the central bank’s policy stance. This is our favorite part.”
I am in the camp that inflation rates will rise. It will just take time and an otside catalyst that pushes short term rates higher.