Economic Outlook

Economic and financial risk insights:

Global economy turns the page on a volatile year with fiscal tailwinds set to strengthen

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This article was written By Mahir Rasheed, Senior Economist, Swiss Re Institute & Gioele Giussani, Junior Economist, Swiss Re Institute

We see upside risks to global growth in the first half of 2026. Divergent inflation trends and ongoing fiscal strains trends lend upside risk to long-dated government bond yields.  As the 10-year US Treasury/JGB differential narrows from very wide levels, capital repatriation may pose upside risk to our 2026 US 10-year yield forecast of 4.2%.  

10-year US Treasury/JGB yield differential

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Economic and financial risk insights Global economy turns the page on a volatile year with fiscal tailwinds set to strengthen

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