We also are benefiting from an increase in productivity that if continued will work to push prices lower. In the past two years productivity gains have averaged between 2.5 and 3 percent, which is quite high by historical standards. These rates are unsustainable, but suggest that there is no immediate risk that current trends are going to stop dead. The bottom line outside the U.S. is less rosy. The economies in Europe and Asia are doing somewhat better than predicted last fall, but to say they are doing well is far from the mark.
Sluggish demand is better than no demand, but still leaves lots of slack in the system.
Combine this with a strong dollar and there's even more argument for lots of competition and downward pressure on prices. Finally, we can look at the role of traders. Interest rate markets are notorious for their trends, and their trend followers. There is a remarkable source of data on bond futures to add confirmation to the above view. This was not a modest shift.