Economic indicators remained largely stable. Growth continues at a reasonable pace, while inflation remains elevated – except in Switzerland. It is therefore unsurprising that most portfolios began the year with positive returns. Nevertheless, a general sense of market nervousness is evident. Gold reached new highs before retreating, individual companies reported record results while their share prices simultaneously corrected – a phenomenon known in the industry as volatility.
This video was recorded on 3 February 2026.
The global economic outlook remains fragile. While the US recorded surprisingly strong growth in Q3 2025, concerns about future developments persist. A weak labour market, limited corporate investment, and subdued sentiment continue to weigh on growth prospects.
China continues to experience a slowdown. Official growth for Q4 was reported at only 4.5%, a relatively low figure for the emerging economy. Actual growth traditionally falls below official figures, which is consistent with weaknesses in consumption and investment.
The Eurozone shows slightly better performance, with GDP growth of 1.3% in 2025. Germany remains the main drag on growth, although it has recently seen modest expansion.
Overall, global growth prospects remain mixed, particularly as the two largest economies, the US and China, have yet to return to stronger growth trajectories.
After a surprising decline in core inflation in November in both the US and the UK, rates remained unchanged in December. Core inflation currently stands at 2.6% in the US and 3.2% in the UK, both above central bank targets. In Japan, it remains persistently high, albeit slightly down to 2.9%.
The Eurozone shows somewhat better stability, with core inflation at 2.3%, largely driven by Germany. Switzerland maintains price stability, with core inflation at 0.5%, slightly up from November.
The US Federal Reserve announced in early December that, after a prolonged period of balance sheet reduction, it will not pursue further reductions for the time being. Subsequently, the balance sheet has even seen a slight increase. Medium-term pressure on the Fed to manage interest rates via asset purchases is expected to remain high, given ongoing fiscal expansion and a large budget deficit.
Direct political pressure on the Fed also persists. Recent intensification of criticism, including threats of legal action against Chair Powell, has raised concerns regarding the central bank’s independence.
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