Quarterly Economic Outlook: First quarter 2026

Global markets are navigating a renewed phase of uncertainty, with shifting US tariff policy, heightened geopolitical tensions, and uneven economic policy signals across major economies. Against this backdrop, the theme of “global rewiring” is gaining traction as supply chains reorganize, the US dollar shows signs of weakening over time, and emerging markets begin to play a larger role in trade and production.

While growth and inflation have held up better than many feared after recent US policy changes, the landscape remains fluid as events from Venezuela to Greenland and Iran add to geopolitical risk premia. Trade volumes are under pressure in the near term even as new regional and bilateral agreements proliferate outside traditional US-centric frameworks.

For investors, this environment argues for selective positioning by country and region rather than broad-brush exposure, with particular attention to diverging inflation paths and interest rate cycles. Many emerging markets now exhibit stronger fundamentals than in past cycles and may benefit from reshoring trends and China–US tensions that redirect capital and trade flows toward alternative hubs.