“What are they smoking?” is what smart-beta pioneer Rob Arnott wonders about Wall Street’s inflation forecasts through the end of 2022. In conversation with Real Vision’s Ash Bennington, Rob, the founder of Research Affiliates, makes the case for structurally higher inflation. He believes there’s a strong chance the Consumer Price Index could hit a fresh high before the year is out. He also thinks higher prices are going to stick, with the CPI printing materially higher through 2023 and into 2024. Rob talks about what the Federal Reserve can and can't do in such an environment, explains the real message the yield curve is sending (it’s not what you think), and identifies attractive areas of the market right now. As Rob puts it, “Successful investing isn’t hard, but it’s painful.” Recorded on August 12, 2022.