I have no idea what bond figures the pundits that you are talking about used for their reasoning. Let alone how they think about it. But I can do my own (at best semi-informed) speculating from some charts that I know how to find.

Long-term treasuries have been going up for a few weeks. Standard textbook theory says that treasuries have no risk except for interest rate changes, so that would suggest that the market is discounting the scenario where a deflationary episode creates long-term near-zero rates. Strike one for the pundits. OTOH the same treasury curve gave little indication that deflation was a concern back when I was first talking about it last year. The crystal ball is sometimes cloudy.

Furthermore swap rates (the premium one pays for the risk of floating vs fixed debt) fell during the Iraq war and have been bouncing around since then with no real direction. Textbook theory notwithstanding, in the last few years a number of bond markets have noted that treasury rates respond to government policy shifts (which affect possible future supply of treasuries), and swap rates are a better direct measure of thinking about interest rate changes. Therefore they actually price off of swaps, not treasuries. This suggests that the pundits are looking at the wrong measure and there is no clear shift in thinking about interest rates (and therefore deflation).

Also both are significantly below the range they were in from December through March. And those rates were ones which already reflected widespread industry concerns about deflation, even if said concerns had not yet reached widespread circulation in the general public. More confident does not equate with very confident.

And finally I see some narrowing of premiums for riskier bond classes in CMBS (the bond market I know best), which says nothing directly about the likelyhood of deflation, but suggests growing confidence within the bond market that marginal businesses will manage to make their payments. Of course that data may be mistaken...

My conclusion is that there seems to be a noticable recent uptick in confidence, but not to levels where one should say that the market is "predicting" that it is over.

Cheers,
Ben