Global Economic Outlook: 2026

This time last year, I wrote about the economic and political turbulence of the preceding four years and how the extraordinary policy settings of that period had left a challenging legacy.

As I looked ahead, I felt that the predominant theme of the coming twelve months would likely be the pace of monetary policy easing in the developed economies of the world.

And so it has proved in many ways, but what I didn’t expect was the political heat and light that would be triggered by President Trump’s “Liberation Day” announcements on tariffs.

In the end, though, the frenzy triggered by that shopping list of numbers, revealed in the Rose Garden in early April, dissipated quickly as it became clear that the worst-case scenario was nowhere near as damaging as first thought.

Indeed, as the year closes, there is a tentative mood of optimism that the upcoming meetings planned between Presidents Trump and Xi in 2026 might usher in a new period of trade détente between the two most powerful nations of the world.

If so, this would be a major positive for global trade and economic growth, as well as for financial markets, given that it would remove a major source of uncertainty.