In recent weeks, market inflation expectations have soared, with the 5-year U.S. inflation swap rate seeing its largest 5-week increase since the eve of Silicon Valley Bank's collapse in March 2023, when the bank's default suddenly shifted market expectations from four Fed rate hikes to a rate cut.
Goldman Sachs believes that the core narrative of the global market is shifting from the &#34;golden-haired girl&#34; economy to &#34;reinflation.&#34; In a &#34;reinflation&#34; environment, the market may prefer assets that benefit from economic recovery and rising inflation. Goldman Sachs is optimistic about the returns of risk assets in the next year, adjusting its stock and credit ratings from neutral to overweight for the next three months.
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In recent weeks, market inflation expectations have soared, with the 5-year U.S. inflation swap rate seeing its largest 5-week increase since the Silicon Valley Bank collapse in March 2023. Goldman Sachs believes that the core narrative of the global market is shifting towards "reinflation", where the market will prefer assets that benefit from economic recovery and rising inflation. Goldman Sachs holds an optimistic view on the returns of risk assets in the next year, adjusting its stock and credit ratings from neutral to overweight for the next three months

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