Fiscal Stimulus: Growth Finds a New Engine
As monetary cycles come to an end, major advanced economies are reviving their fiscal policies. The United States, the eurozone, Japan: everywhere, governments are taking the reins. This shift could shape the macroeconomic landscape of 2026.
An Unprecedented Budgetary Turning Point
In the United States, recent weak performances by Republican candidates in regional elections are providing more room for the current administration. The proposed support measures—including « carbon fee dividend checks"—demonstrate a commitment to cushioning the effects of the slowdown while stabilizing the cycle before the midterm elections. Inflation, which has been more persistent than expected, does not seem to be preventing this budgetary shift. In this context, another rate cut by the Fed in December is anticipated, but the easing path anticipated by the markets seems difficult to maintain, even under a more accommodative presidency.
In Europe, the expected recovery in 2026-2027 relies less on private demand than on the announced fiscal expansion in Germany and the Netherlands, two countries long committed to strict fiscal discipline. This shift is creating unprecedented cyclical support for the eurozone. On the central banks' front, the ECB and SNB are expected to keep their rates stable in 2026, marking the end of the tightening cycle.
As for Japan, it is undergoing an unexpectedly large fiscal stimulus, as evidenced by a supplemental budget significantly higher than anticipated. This direction could force the Bank of Japan to accelerate its rate hikes, confirming a gradual exit from an ultra-accommodative monetary policy.
A New Macroeconomic Balance for the Markets
This reconfiguration alters traditional benchmarks. Yield curves are expected to steepen as growth expectations improve. The dollar may continue to weaken, but more gradually, while the Swiss franc and gold remain favored in an uncertain environment. For equities, the tone shifts from tactical caution to a more constructive neutrality, with renewed interest in the industrial and consumer discretionary sectors, while utilities are moved to a more neutral stance.
Geographically, a preference remains for European and Swiss equities, reflecting better macroeconomic visibility and more attractive valuations compared to American stocks. Ultimately, the year 2026 might mark a significant shift: growth driven not by central banks but by governments, redefining the traditional drivers of the markets.
This content has been automatically translated using artificial intelligence. While we strive for accuracy, some nuances may differ from the original French version.
