Deflation Doomsayers Lose Sway Over Debt as Pimco Defects

The world’s central banks are beginning to convince the bond market that they can beat back the threat of deflation.

At the start of the year, the deteriorating global growth outlook, Europe’s protracted malaise and the collapse of oil had investors pricing in the likelihood of little or no inflation for years to come. Euro-area consumer prices matched the biggest drop on record and traders even braced for deflation in the U.S.