A lot can change in a year. At this time last year, the world was facing an unprecedented economic and health crisis. There were concerns that the loss of economic activity would affect demand which could cause the economy to go into a deflationary spiral. As a result, the central banks injected trillions of liquidity into financial markets, the federal government spent trillions to help small businesses and individuals, and companies started aggressively cutting costs to preserve cash.

Today much has changed, and it's clear that the worst of the economic and health crisis is behind us. In a year, commodity prices went from multi-year lows to new highs in many instances. Rather than being concerned about deflation, inflation seems to be the biggest concern.

While investors should continue to monitor inflation data, it's far from being a significant threat to the bull market or economic recovery. Here are three reasons why:

1. YoY Comps are Misleading

We are certainly seeing higher inflation readings across numerous metrics whether it's consumer prices, producer prices, or commentary from companies on earnings calls. For example, the latest CPI for April showed a 4.2% increase in prices from last year, and the PPI showed a 6.2% increase.

However, this data is misleading given the extreme circumstances around last year. Prices were plummeting as d...