Economic and Strategy Viewpoint

Schroders forecasts stronger-than-expected global growth for 2026-27, supported by a central bank bias toward rate cuts despite overheating risks. However, this policy stance risks a significant inflation shock and fiscal instability by 2027.

Key Takeaways

• 1.Global growth is forecasted to exceed consensus expectations in 2026-27, providing a supportive backdrop for risk assets.
• 2.Central banks in the US and UK are likely to cut interest rates further in 2026 despite strong underlying growth fundamentals.
• 3.The nomination of Kevin Warsh as Fed Chair introduces risks related to aggressive quantitative tightening (QT) and sovereign debt instability.

Table of Contents

• Schroders Baseline Forecast
• Global
• United States
• Eurozone
• United Kingdom
• China
• Scenario Analysis
• Important Information

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