Inflation expectations are based on the past ten years of experience, and they will remain anchored if inflation remains low. Central banks must pull current inflation sharply lower to maintain this benign inflation history. This will entail pulling corporate profits sharply lower, as firms will only cut back job openings and jobs under the duress of a profits squeeze. On a 6-12 month horizon, investors should remain long bonds, both in absolute terms and relative to stocks and commodities. The outperformance of euro area retailers is likely to continue, as some decline in euro area inflation will come from the delayed impact of falling energy inflation. Vale is a rebound candidate, while sugar and gold are reversal candidates.