It appears that 2017 is setting up as a typical late cycle year of inflation.
That's certainly what the long bond seems to expect:
But there are other reasons to think that inflation may be about to hit a recent high.
To begin with, over the last 8 months, prices have increased 1.7%, or roughly a 2.5% annualized rate:
To a large extent, this is about oil and gas prices normalizing as shown on the below graph of gas's YoY% change:
Additionally, CPI for shelter has been increasing at over 3% a year:
Since house prices tend to follow sales, and house sales have made new highs in the last few months, that suggests that house price inflation might also accelerate:
As I wrote several weeks ago, we may be coming in for a good spate of employment numbers, including a decline in the unemployment rate, and this will add to some wage pressure:
So there is good reason to believe that the inflation rate is going to increase significantly over 2% next year.