By Girard Miller, includes “… the Federal Reserve has announced that it will fiddle with its inflation targets. … the central question … is whether it is now realistic to expect that the real rates of return on pension portfolios will remain persistently higher … particularly if monetary inflation erupts. The second question, and perhaps the most directly relevant to their inflation enigma, is whether public pension plans can continue to rely on the backstop that financial markets had historically given them to cover the COLAs baked into the benefits payable to retirees.”
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