What economic story do yield and inflation curves tell?

We look at yield and inflation swap curves in the United States and the euro zone to see what economic story these curves and therefore financial markets tell for the coming years (1, 2-5 years). With regard to future inflation, we see expectations of inflation remaining above 2% in the United States and returning to below 2% in the euro zone. With regard to future nominal interest rates and therefore future monetary policies and growth, we see expectations of a gradual, slow and contained rise in nominal interest rates, without any trend break (therefore without expectations of a crisis). With regard to future real interest rates, which tell us about the expected tightness of monetary policies and the savings-investment equilibrium, we see expectations of real interest rates remaining negative, and even highly negative in the case of the euro zone. Altogether, financial markets see inflation becoming acceptable again and monetary policy becoming moderately more restrictive, keeping real interest rates negative and therefore continuing to provide strong support for the economy and asset prices.