The term “behind the curve” has been used to describe a Federal Reserve (Fed) that is perceived to be late in lowering or raising interest rates in response to changing market or economic conditions. The most common use of the phrase is to describe the Fed as behind the curve on inflation. The Fed showed little concern over inflation during last week’s Fed meeting, despite the monthly consumer price index (CPI) report showing a continued rise in price pressures for May 2014 with recent gains accelerating Fed Chair Janet Yellen downplayed the recent rise in inflation as likely “noise,”but the response still left investors questioning whether the Fed is behind the curve. Intermediate- to longer-term bond prices, which are most sensitive to inflation pressures, finished last week (June 16 – 20, 2014) slightly lower, and market expectations of future inflation, as measured by Treasury inflationprotectedsecurities (TIPS), moved higher. The implied breakeven inflation rate on 10-year TIPS rose to near a one-year high….