Goldman Sachs Exchanges• Jan 13, 2026• 25:32Interview

Goldman Sachs Exchanges: Outlook 2026 | Episode 1: The Big Picture

From Goldman Sachs Exchanges

The Big Picture

Executive Summary

Goldman Sachs holds an optimistic, above-consensus outlook for global economic growth in 2026, driven by fiscal support in the U.S.
and Germany, and easing financial conditions.
is forecast to lead with 2.5% GDP growth, supported by a significant post-pandemic productivity surge that allows for non-inflationary expansion and enables Federal Reserve rate cuts.
China's economy presents a split picture, with a historic export-driven current account surplus creating headwinds for trading partners like Germany, while its domestic property sector remains a significant drag.
The economic impact of AI is still in its early stages, with current productivity gains not yet reflecting its adoption, suggesting a future source of significant growth acceleration.

9 quotes

Concerns Raised

A potential negative feedback loop where a deteriorating labor market hits consumer confidence and spending, triggering a recession.
High valuations in the U.S. equity market could limit upside potential and increase volatility.
China's massive export surplus creating sustained headwinds for European, and particularly German, industrial competitiveness.

Opportunities Identified

U.S. and global growth surprising to the upside, leading to outperformance in equities and other cyclical assets.
Further productivity gains from AI adoption that are not yet factored into current economic trends.
Continued disinflation allowing for further monetary easing from the Fed and BoE, supporting risk assets.

Key Themes

Above-Consensus U.S. Growth

Goldman Sachs forecasts robust 2.5% U.S. GDP growth, significantly higher than market consensus. This optimism is driven by fiscal stimulus, the lagged effects of past rate cuts, and easing financial conditions, suggesting markets have room to upgrade their expectations.

This bullish view implies potential upside for U.S. equities and other risk assets if the market converges to this more optimistic growth scenario.

The Productivity-Labor Market Disconnect

Solid economic growth is not translating into a tighter labor market due to a sustained increase in U.S. productivity. This trend allows the economy to grow faster without stoking wage inflation, keeping the unemployment rate stable around 4.5%.

This dynamic of non-inflationary growth gives the Federal Reserve greater flexibility to cut interest rates to support the economy without risking an overheat.

China's Growing External Imbalance

China's export-oriented sectors are thriving, projected to create a record-breaking current account surplus equivalent to 1% of global GDP. This strength compensates for severe domestic weakness, particularly in the property sector, which subtracts 1.5 percentage points from growth.

This massive imbalance creates significant geopolitical and economic friction, acting as a direct headwind for the industrial sectors of trading partners, especially Germany.

The Nascent Impact of AI

Despite significant investment, AI has not yet had a measurable positive impact on U.S. GDP or productivity. This is attributed to the import-heavy nature of AI hardware and accounting methods that classify key components as intermediate goods rather than investment.

This indicates that the widely anticipated economic benefits of AI are a future opportunity, suggesting a potential for further productivity acceleration that is not yet factored into the economy's current 'speed limit'.

Divergent Central Bank Policies

As inflation concerns recede, the Federal Reserve and the Bank of England are expected to implement further interest rate cuts in 2026. In contrast, the Bank of Japan is forecast to continue its slow path of rate hikes, creating a divergence in monetary policy among major economies.

This policy divergence will drive currency market dynamics and influence global capital flows, creating opportunities for investors positioned for continued easing in the U.S. and U.K.

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