, Columnist
The Reflation Trade Is Losing Some Air. About Time
It had come too far, too fast so it’s no surprise that the market took a step back after the consumer price data.
A popular bet has encountered a spot of deflation.
Photographer: Ronny Hartmann/Getty Images EuropeThis article is for subscribers only.
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The Reflation Trade enjoyed an exciting rendezvous with the facts on Tuesday. For months, the bond market has shifted to signal coming reflation. Everyone knows that the headline number will look bad for the next few months, because oil prices dropped precipitately a year ago; the question is whether a rare combination of massive fiscal stimulus and a strenuously easy monetary policy can at last jolt the U.S. and the rest of the world into an inflationary psychology.