Actually, in my post I was agreeing with you. The data indicates inflation is basically back down to the Fed target range once you take into account the lagging indicator of housing. I've posted two conflicting posts in this thread, one talking about how inflation is back down, and one where there is a real scenario of higher inflation for the next 10 years.
If I were to summarize my overall thought, it would be that inflation is better off right now than the numbers indicate, which is good. However, I'm not convinced that over the next several years the federal government will really deliver 2% inflation via Fed actions. I believe the inflation number will bounce around at higher levels up and down, with an average somewhere between 2.7-4%.
Bottom line is that as bond investors it's virtually impossible to figure out an optimized investment strategy from both a bond maturity perspective, or an inflation bond vs normal bond perspective. So, it leaves a ladder as the only reasonable approach, with a bit of a coin flip on what percentage to make inflation bonds vs normal bonds.
Right now, I'm struggling to invest in TIPS, because even though the real returns are projected to be high, at the end of the day 10 year Treasuries are only at around 4%, which is not a great return as compared to other asset classes, or what they might be if rates do drift up.
Although theoretically the TIPS value should increase if rates do drift up, that is not an absolute certainty, because there could be movement in rates that are independent of inflation numbers. For example, just having higher spreads between government and corporate bonds. In that scenario the TIPS investment really doesn't pay off.
