Like most economists, I’ve been busy peering into the crystal ball for 2026. It’s foggy, naturally, and dare I say it, a bit… boring. The consensus? Reasonable US growth, underpinned by AI and high income consumers. Europe looks steady, though buoyed by German stimulus. The Fed is edging closer to neutral – albeit perhaps now more slowly – while the ECB is already there and is likely to keep rates on hold through 2026. Our full outlook will be with you in a couple of weeks, but my FX colleagues think the net effect is a weaker dollar and a low volatility environment that favours the carry trade. But life doesn't ... (full story)