Global inflation is accelerating according to the Organization for Economic Cooperation and Development. Inflation for the Group of 20 leading industrial and developing nations was reported at +2.5% year over year in March, up from +2.3% in February. The G20 represents 90% of global economic activity. Entering 2014, we believed that with US economic growth stabilizing and employment increasing, a primary driver of monetary policy decisions and the direction of rates would be inflation expectations. One of the explanations for below trend inflation in the first quarter has been depressed goods pricing, which was in part driven by lower import prices. Despite weak inflation readings from Europe and Japan, the overall global trend appears to be a slight increase in the rate of rising in prices, which will eventually make their way into the U.S. This, combined with rising owners equivalent rent (20% of the Fed’s favored inflation gauge, PCE), are clear indications that inflation is likely to tick up in the coming months. You can be sure that bond inventors and the Fed are paying close attention.