As for what you can do. Yes, the "market" will be wildly wrong in expectations sometimes. Inflation is a large and ever-present risk, which Bernstein argues is both the biggest risk and the one which you can most easily compensate for.
The first much-debated option on this forum is to have a long-term fixed-rate mortgage, which will evaporate (or sublimate? sub-prime-ate?) with high inflation. Another option might be to invest in "value" companies / companies with a lot of debt liabilities, for the same reason that they will continue to earn money while their debts evaporate, making them more valuable. Bill Bernstein argues that stocks of commodities companies and especially precious metals producers have historically done very well during high inflation. Inflation protected bonds (TIPS in tax-sheltered accounts, i-Bonds) are another choice, but all they will do is avoid losing money themselves, they won't compensate for other losses or have high long-term returns. "Real" investments like real estate are also a good choice. Some people say gold, but history so far has shown that to be hit and miss, it is merely uncorrelated, not negatively correlated.