Consensus forecast for 2026

• The Globe
  Eurizon

On the macro front, 2026 is likely to bring ongoing economic global growth

Growth in the Eurozone should level off at 1.1%, down from a forecast annual rate of 1.4% in 2025. However, this would be only an apparent slowdown, as in 2025 growth had been inflated at the beginning of the year by the frontloading of exports aimed at beating the introduction of US trade tariffs.

In the US, growth estimates for 2026 are aligned at 2%, the same level as in 2025: a stable pace of growth, faster than in the Eurozone, but weaker than in the first part of the present cycle, as growth in the pre-Trump era was 3%.

For what concerns inflation, 2026 should not bring particular surprises

In the Eurozone, inflation averaged 2.1% in 2025 and is presently forecast at 1.8% in 2026. Therefore, inflation has dropped back into the ECB’s 2% target area, after the 2022 shock when it had peaked at 10.6%.

Core inflation, that in 2025 averaged 2.4%, is forecast at 2.1% in 2026, marking a return of this component of inflation to the ECB’s target area as well.

In the US, after the 2022 shock with a 9.1% peak, inflation is stabilising inside the 3% area, one point above inflation in the Eurozone. The failed decline to 2%, as targeted by the Fed, reflects a more upbeat pace of growth for the US economy than that of the euro area, as well as the impact on imports of the trade tariffs introduced over the past few months. In any case, the fact that the trade war has not reignited inflation, but simply delayed its drop to towards 2%, should be viewed positively.

As regards to China, growth in 2025 is set to achieve the 5% target laid out by the government. Consensus forecasts are currently just below 4.5% for 2026, and just above 4% for 2027. The fact that expectations are lower than the 5% target may indicate that economists do not rule out a lowering of the growth target to 4.5% in 2026. The decision will be taken in March, during the National People’s Congress (NPC).

The fact remains that China, with a stable annual growth rate of between 4.5% and 5%, should be considered as a stabilising factor for the global cycle. It should also be said that the ongoing growth phase will take place in the absence of inflation. Inflation will average zero in 2025, and the current estimate for 2026 is 0.8%, albeit with a prevalence of downside risks.

In 2026, Central Bank interest rates should remain stable in the Eurozone and drop moderately in the United States

Last June, the ECB completed the alignment of monetary policy rates with inflation and has been on hold ever since. The baseline scenario sees the ECB staying on hold throughout 2026, with rates at the same level as inflation, at 2%, therefore with a neutral impact on monetary policy.

This level of interest rates leaves the ECB with some leeway to support the economy in case of an unexpected slowdown, by resuming accommodation. A resumption of rate hikes, on the other hand, as some ECB board members have not ruled out, would require an acceleration of economic growth and a resulting increase in inflation: a development which seems unlikely at the moment.

After staying on hold for nine months, the Fed cut rates again in September and has since lowered the policy rate by 25 points on three occasions. At their current levels, with the Fed funds rate corridor at 3.5%-3.75, rates are still higher than inflation, which is levelled off in the 3% area.

The Fed is likely to complete the process of neutralising monetary policy in the first half of 2026, bringing rates at the same level as inflation. It should then stay on hold, as the ECB is already doing.

According to the baseline scenario, government bond markets may move little, as was the case in 2025

In a context such as the one described above, characterised by an ongoing economic cycle with no real volatility affecting growth and inflation, the Central Banks will change little, as also the bond markets as a result.

Based on these expectations, investors could cash in the coupon flow offered by the Born markets and cash in capital gains, in case of an unexpected slowdown of the economic cycle (anti-recession Insurance policy).

On the stock markets, the future trend of indices depends on the combined evolution of earnings and multiples (Price Earnings ratio, PE). While there are no consensus expectations for the PE, analysts do draw up estimates on earnings.

In the Eurozone, Eurostoxx earnings are forecast to increase by 14.3% in 2026 and 12.4% in 2027. In the United States, S&P 500 earnings are forecast at +14.4% and at 14.5% in the next two years. These estimates reflect the usual important contribution made by the technology sector in the US. For what concerns the Eurozone, after dropping for a year (-1.2% in 2025) due to the impact of the strong euro, earnings should recover in consideration of the stabilisation of the exchange rate and of ongoing economic growth, also boosted by the defence and infrastructure spending plans.

In both the United States and Europe, current consensus forecasts seem rather optimistic, albeit not unrealistic.

Earnings growth cannot be considered as a proxy of the expected return from the underlying markets, as it must be combined with the change in the PE ratio.