This paper examines inflation and the role of inflation-hedging assets in an institutional portfolio. Even in the current environment of low realized inflation, inflation risk remains, in the form of inflation surprises, which have historically been damaging for equity and bond portfolios. Traditional inflation-hedging assets include commodities, natural resources equities, and TIPS, among others. Meketa Investment Group recommends that investors evaluate inflation risk by focusing on inflation surprises rather than on realized inflation. Furthermore, when allocating to inflation-hedging assets, institutional investors should approach this problem from a total portfolio perspective, which includes determining individual inflation-hedging objectives and considering the return and risk tradeoffs that inflation-hedging assets introduce to a portfolio.