• When St Louis Fed's Bullard last spoke on inflation expectations on Feb 17, 5Y breakevens were 2.93% (with the dip below 3% from late 2021 a welcome sign) and 5Y5Y inflation swaps 2.40%.
• Today, 5Y breakevens are 3.50% and 5Y5Y inflation swaps are 2.74%.
• They are susceptible to surging commodity prices (EU 5Y5Y up from 1.76% to 2.29% over the same period) but nevertheless mark an increasingly large overshoot of an increasingly higher longer-term level.

US 5Y breakeven (white), US 5Y5Y inflation swap (yellow), differential (green) and EU 5Y5Y inflation swap (purple)Source: Bloomberg