Reflation Prevails Over Everything Rally: Morgan Stanley’s Sheets

The transcript discusses the current state of US real yields and the potential end of the 'everything rally.' It highlights the strong performance of both reflationary winners and traditional safe havens, suggesting a market tension that may soon resolve. The discussion then shifts to the difference between reflation and inflation, with a focus on gold's declining role as an inflation hedge. The transcript concludes with an analysis of US inflation break evens, indicating that the market does not expect runaway inflation, which impacts the rationale for holding gold.

Why is gold considered a hedge against inflation, and what is the current perspective on its performance?

What does the market currently expect regarding inflation over the next five years compared to the next thirty years?