Once again, the consensus sees little prospect for lower bond yields in 2011 and even former bulls have turned bearish. The December 29 WSJ ran with Fixed-Income Pro Favors Stocks. Sentiment towards bonds is so depressed that even fixed-income strategists want to switch coverage. And inflation is back on everyone’s radar screen just as it was a year ago when the core rate of inflation was nearly triple what it is today. So it comes as little surprise, at least to us, to see this title show up in the Current Yield column in Barron’s: Fear Inflation? TIPS for 2011. In our view, the surprise will be the same in 2011 as it was in 2010 — deflation is the primary risk.