TYBS - Is Deflation Risk Rising?

Judging by the stock market, the odds are rising for a reflationary run. Economic data, however, offer a conflicting view.

Let's start with stocks, everyone's favorite discounting machine for guesstimating the future. The S&P 500 Index, after plunging last month at the steepest, fastest pace in the past 70 years, is on a tear following last month's low. As of Wednesday's close (Apr. 29), the peak-to-trough decline has been pared to relatively modest 13.2% slide - less than half the deepest point in the latest drawdown: -33.9% on Mar. 23.

By the market's reckoning, the

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