Heading into 2026, global growth remains intact, but less certain. While the U.S. economy continues to benefit from AI-driven investment, solid consumer balance sheets, and targeted fiscal support, structural risks are growing. Inflation is proving sticky, labor dynamics are shifting, and the Federal Reserve faces a delicate balancing act. Globally, trade tensions, geopolitical conflict, and tech competition complicate the outlook. For investors, 2026 is a year to stay disciplined and selective, positioning for innovation-fueled growth while remaining alert to late-cycle fragilities.
The global economy proved remarkably resilient in 2025, weathering policy shifts, trade tensions, and inflationary pressures, which has ultimately led to upward growth forecasts. Moving into 2026, the same forces that underpinned last year’s growth—strong household and corporate balance sheets, agile policy responses, and accelerating AI investment—are reshaping the macro landscape in significant ways.
In the U.S., artificial intelligence has become a structural growth engine, with capital expenditure tied to AI infrastructure accounting for nearly half of GDP growth in early 2025. This is set to continue in 2026, even as valuation concerns rise and the economic payoff of AI remains uneven. Meanwhile, fiscal policy adds another layer of complexity: the One Big Beautiful Bill introduces short-term stimulus with potential long-tail investment effects.
Labor market dynamics are cooling, but remain stable. Slower hiring and tighter immigration may constrain growth without triggering a broad employment downturn. Inflation remains sticky, and with structural forces now driving price pressures, the Federal Reserve is expected to proceed with only modest rate cuts.
Globally, trade realignments and technology competition are intensifying. China is leaning into intra-Asian supply chains and innovation leadership, while Europe balances muted domestic demand with newfound fiscal flexibility.
Overall, 2026 presents a paradox: innovation is fueling optimism, but market fragility and late-cycle risks are rising. For investors, that means remaining nimble and embracing transformative growth while managing concentration and policy risks across an evolving global landscape will be essential.
Read our full 2026 Perspectives for more key insights from our investment leaders.
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