Crystal Ball 2026 – Down but not out

 Across global banks, asset managers, and research institutions, the consensus view for 2026 is of a sub-trend but resilient global economy transitioning into a post-inflation, late-cycle phase.

Growth is expected to remain positive but uneven, led by the U.S. and parts of Asia, while Europe lags amid structural and fiscal constraints. Inflation is broadly forecast to moderate toward central-bank targets, giving policymakers room for gradual and cautious rate cuts, though a return to the ultra-low-rate era is not expected.

Financial markets are seen shifting from liquidity-driven gains to earnings- and fundamentals-based performance, with lower average returns, higher dispersion across assets, and sustained volatility.

Structural forces — geopolitical fragmentation, elevated debt, demographic pressures, and the transition to a more multipolar global order — dominate cyclical drivers, while technology and AI-led productivity gains remain the key upside risk.

Overall, institutions describe 2026 as a year of normalization rather than acceleration, where selectivity, diversification, and risk management matter more than broad market beta.

Here is a snapshot of global outlooks for 2026 based on reports published by leading banks and asset managers.

Crystal Ball 2026 — Consensus Takeaway

Growth: Sub-trend but positive

Inflation: Lower, not gone

Rates: Gradual easing

Markets: Lower returns, higher dispersion

Risks: Geopolitics, debt, fragmentation

Goldman Sachs Asset Management- Cautiously constructive

•      Global growth remains positive but below pre-pandemic trend

•      U.S. avoids recession; growth slows but stays resilient

•      Inflation normalizes further, allowing gradual rate cuts

•      AI-led productivity gains support medium-term optimism

•      Markets likely to favor quality assets over cyclical risk

Fidelity International - Bottom-up cautious

•      Earnings growth becomes more important than multiple expansion

•      Markets increasingly stock-specific

•      Inflation volatility declines but does not disappear

•      Policy mistakes remain a risk

•      Active selection emphasized

Crédit Agricole - Cautious normalization

•      Global growth stabilizes below trend

•      Rate cuts begin but are gradual

•      Credit conditions ease slightly

•      Europe remains vulnerable

•      Financial stability risks monitored

Bank of America - Neutral-to-defensive

•      2026 characterized by slow growth, lower inflation

•      Labor markets cool but avoid collapse

•      Equity upside capped by valuations

•      Bond returns improve versus past decade

•      Policy errors remain key tail risk

Morgan Stanley - Constructive with volatility

•      Growth moderation continues into 2026

•      AI investment supports productivity upside

•      Inflation falls but wage pressures linger

•      Markets transition from liquidity-driven to earnings-driven

•      Increased scenario dispersion

Deutsche Bank - Cautiously pessimistic

•      Global economy avoids recession but lacks momentum

•      Fiscal constraints grow more binding

•      Europe underperforms peers

•      Trade fragmentation intensifies

•      Policy coordination weakens

Citi - Late-cycle cautious

•      Global economy slows into late-cycle phase

•      Inflation normalization supports risk assets

•      Earnings growth uneven

•      Dollar volatility increases

•      Policy uncertainty remains elevated

Moody’s – Credit risk persists

•      Sovereign credit pressures persist

•      High debt constrains fiscal policy

•      Growth insufficient to offset demographics

•      Default risks remain elevated in weaker economies

•      Structural reform critical

State Street Global Advisors - Balanced, risk-aware

•      2026 characterized by late-cycle dynamics

•      Policy rates peak and transition into easing phase

•      Equity returns more moderate than 2023–24

•      Greater dispersion across regions and sectors

•      Volatility structurally higher than pre-2020

BNP Paribas Asset Management - Defensive with selective opportunity

•      Global economy stabilizes but growth remains fragile

•      Europe lags the U.S. and parts of Asia

•      Disinflation trend continues, but uneven

•      Sustainability and energy transition remain long-term drivers

•      Policy uncertainty remains a core risk

J.P. Morgan Asset Management - Constructive but selective

•      Global growth slows but avoids a hard landing

•      Inflation converges toward targets in major economies

•      Central banks gain flexibility in policy

•      Equity returns positive but less broad-based

•      Income and alternatives regain importance

Allianz Global Investors – Active management

•      “New regime” investing continues into 2026

•      Inflation lower, but not returning to ultra-low era

•      Bonds regain relevance as diversifiers

•      Valuations matter more than liquidity

•      Active management favored

Barclays Private Bank - Capital-preservation focused

•      Growth decelerates but remains positive

•      Inflation pressures ease unevenly

•      Higher dispersion across asset classes

•      Defensive positioning favored over aggressive risk-taking

•      Liquidity conditions stabilize

HSBC Asset Management - Global and thematic

•      Global economy transitions toward lower-inflation equilibrium

•      Asia remains the main growth engine

•      U.S. slowdown manageable

•      Climate transition reshapes capital flows

•      Diversification essential

Capital Economics - Macro-pessimistic

•      Global growth remains structurally weak

•      China’s slowdown is secular, not cyclical

•      Advanced economies face aging-related constraints

•      Inflation risks fade faster than growth risks

•      Downside skew remains

MUFG Research – Asia to outperform

•      Asia outperforms developed markets

•      Japan benefits from structural reform

•      China stabilizes at lower growth

•      Currency volatility persists

•      Global financial conditions ease slowly

BlackRock - Regime-change thesis

•      “Fragmented world” theme dominates 2026

•      Higher macro volatility is structural

•      No return to pre-2020 stability

•      Tactical allocation favored over strategic beta

•      Geopolitics shapes returns

Invesco - Selective opportunity

• Market leadership narrows

• Valuation discipline returns

• Alternatives gain prominence

• Income strategies regain relevance

• Long-term themes outweigh cycles

ING - Macro-conservative

•      Growth stabilizes at low levels

•      Europe structurally underperforms

•      Inflation risks fade faster than growth risks

•      Trade fragmentation remains drag

•      Downside risks dominate upside