Joining virtually from New York, Robert Sockin, Senior Global Economist at Citi, opened the session by outlining key themes shaping the global economy in 2025 and highlighting what decision-makers should monitor closely in 2026.

The 2026 outlook points to a “Goldilocks” scenario with close to trend growth, moderating inflation, and central bank rate cuts:

• Resilient Economic Performance: The global economy continues to defy expectations despite ongoing challenges. Sockin described this as the “most bullish economic outlook in years.

• US/Global trade shifts due to tariffs: Tariffs have had notable effects on global trade patterns, inflation, and spending, though their impact has so far been less severe than initially anticipated. Tariffs are contributing to a global rebalancing, with the largest gains seen in emerging markets well positioned to compete with China.

• Diverging US & Global Inflation: In the US, spending has been frontloaded in anticipation of higher tariffs, exceeding earlier expectations. As a result, tariffs are delaying the return to the Federal Reserve’s 2% inflation target. Outside the US, inflation continues a downward path and is not a major concern.

• Global Monetary Policy Easing: Globally, central banks are now well into an easing cycle, though approaches vary across countries. Norway, for example, has already begun easing. Sockin noted increasing pressure on the Federal Reserve, including political influence and the prospect of more dovish-leaning appointees over time. While news flow can generate concern, these dynamics are clearly part of the current environment.

• Advances in Artificial Intelligence: AI-related spending remains a positive driver of economic activity. Sockin suggested AI could potentially contribute up to three percentage points to US economic growth, with broader transformation of the US and global economy possible over the next three to five years. AI could also be transformational for developing economies.

However, questions remain around productivity gains. It is still unclear how much of current productivity trends can be attributed to AI versus tight labor markets. Analysts are examining whether AI exposure correlates with unemployment across industries and expressed concern about long-term labor market implications. Investor patience will be critical, particularly as bond investors continue to fund much of the AI buildout.