Societe Generale's Albert Edwards has warned for some time that we are on the precipice of deflation.
But in his new note to clients, he seems utterly bemused. Markets just don't seem to care.
"Markets remain stoic about the risks of outright deflation in the US and eurozone for one very simple reason," he writes.
"They simply do not believe a recession that would trigger outright deflation is on the horizon. Quite the reverse - they believe with all their heart that we are at the start of a self-sustained recovery. That is despite the fact that the US recovery is already noticeably longer than average, and that the classic signs of old age, such as rapidly slowing productivity growth and stagnant corporate profits, can clearly be seen."
Market expectations of inflation - via the 10-year bond market - has "remained entrenched" above 2% for more than a year, Edwards writes.
"A chasm is growing between reality, both on a core and headline basis, and expectations," he says. "If investors begin to doubt the economy recovery then they will no longer be able to ignore the lurking deflationary threat. Rapid market moves would ensue."
Check out Edwards' chart:
SocGen