Head of Research and Discretionary Management at LIOR Global Partners, Christophe Barraud has once again been ranked the world’s best forecaster by Bloomberg for the accuracy of his macroeconomic analyses.
This international recognition covers the United States, China, and the eurozone simultaneously, a rare achievement in the profession. For nearly fourteen years, Christophe Barraud has regularly topped the Bloomberg rankings, establishing himself as one of the most consistent and reliable forecasters worldwide, in a macroeconomic environment marked by successive crises, major geopolitical upheavals, and high market volatility.
When we talk about “coordinated” rate cuts, I think we first need to consider each case individually. However, the underlying idea remains the same: whether in the United States or Europe, we anticipate a slowdown in inflation compared to 2025.
That said, the situations are different. In the United States, we must keep in mind the Federal Reserve’s dual mandate: employment and inflation. However, the labor market appears more fragile and vulnerable today. Business demand remains limited due to significant uncertainties: political, particularly with the midterm elections, but also commercial and geopolitical.
Furthermore, if we put artificial intelligence aside, the traditional economy is showing rather sluggish growth. On the inflation front, my analysis is that we have passed the peak of the impact of tariffs. There may still be some tension at the beginning of the year, linked to seasonal effects or a temporary rise in energy prices, but the underlying trends are favorable.
Food price growth is slowing, leading indicators for rents show a sharp deceleration, and inflation in services excluding rents should follow wage dynamics, which are themselves slowing. In this context, there is clearly room for rate cuts: my central scenario forecasts three rate cuts in the United States in 2026, possibly starting in the second quarter.
In the eurozone, rate cuts are not fully priced in by the markets—the probability is less than 50%—but they remain a possibility. Inflation is expected to slow and fall below 2%, and there is a growing awareness of the loss of European competitiveness, particularly vis-à-vis China and the United States, amplified by a strong euro. In a world highly focused on inflation, this slowdown alone may be enough to trigger at least one rate cut.
Finally, in China, a rate cut is also possible, particularly in the first half of the year, given the need to support consumption, stabilize the real estate market, and provide liquidity. Overall, 2026 should be marked by a more accommodative global monetary policy, despite a few exceptions such as Australia and Japan.
I have indeed significantly revised my forecasts for the United States upwards, and this is due to several very concrete factors. The 2026 forecast is largely influenced by the base effects at the end of 2025. The third quarter was particularly strong and has even been revised slightly upward.
We thought the fourth quarter would slow significantly, particularly due to the shutdown, but year-end consumption held up better than expected. In addition, imports were significantly lower than we anticipated, which should allow for Q4 growth of close to 3% and a mechanical increase in growth for 2026.
In the first half of 2026, tax cuts should continue to support consumption, not only among the wealthiest households, but overall. Anticipation of rate cuts will also support consumption and investment. Added to this is continued investment in artificial intelligence, which remains an important driver.
However, I am more cautious about the second half of the year.
Current investment levels are not sustainable indefinitely. There is a risk of a backlash after the fiscal stimulus, reinforced by political uncertainties related to the midterms. This could create a period of stagnation.
Overall, these factors lead me to forecast growth of around 2.7% in 2026, which is higher than the consensus. This also reflects a global environment marked by rising public spending and strategic investment in many areas. The United States, particularly in high value-added technologies, should benefit from this.
That said, there are still some weaknesses. Certain sectors, such as freight, continue to be penalized by trade tensions. Artificial intelligence is creating a positive shock in real GDP and productivity, but it is also destroying jobs in certain sectors. US growth remains uneven, heavily concentrated in high-income households and tech, to the detriment of the traditional economy. Finally, there is a risk of overinvestment, particularly in data centers, with monetization assumptions that are sometimes overly optimistic.
Very clearly, this is a problem with the economic model, and more specifically a problem with investment. Europe has missed several major turning points, particularly in artificial intelligence. The situation is often summarized as follows: the United States innovates, China copies, and Europe regulates.
This translates into low growth potential. Achieving 1.5% growth is already a maximum. Productivity gains are insufficient, technological delays are glaring in certain segments, and there is a lack of strategic vision, exacerbated by political interference in many European countries.
Italy is a somewhat special case, with an economic framework more inspired by Mario Draghi’s vision, which has led to greater clarity. But we must not idealize the situation: the constraints remain significant.
Financing is a major obstacle. The tax framework is not always incentivizing, and European banks have less room for maneuver than their US counterparts, particularly in terms of securitization. Finally, governance among 27 countries complicates joint decision-making: Europe makes progress mainly in times of crisis, much less so in the long term.
Both. In the short term, the slowdown is partly cyclical, linked to less intense stimulus measures and the expiry of certain measures at the end of 2025. For 2026, we anticipate growth of around 4.7%, slightly above the consensus but slower than in 2025.
Real estate remains a significant drag, both directly and indirectly, via a negative wealth effect, as it accounts for around 60% of household wealth. But the main challenge is structural and demographic: China’s population has started to decline earlier than expected.
The strategic response is clear: refocus the model on consumption and increase its share of GDP to 45-50%, compared with around 40% today. This means reducing the very high savings rate, which is linked to uncertainties about education and healthcare. More significant announcements could be made after the Chinese New Year.
Finally, technology is the other major focus. Progress is rapid. 2025 was only a first draft, and I would not be surprised if, by the end of 2026, Chinese AI models rival American models, while being significantly less expensive.
