UBS: Global Economics & Markets Outlook 2026–2027
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UBS released its 2026–2027 global economics and markets outlook, noting that global growth has rebounded from the tariff-induced confidence shock, though tariff pass-through will continue to drag on growth in the coming months. The probability of a US recession has declined to 37% in December 2025 from 47% in April, supported by hard data models where the recession probability dropped from 0.90 to 0.74.
Global GDP growth is projected at 2.9% for 2026 and 2.7% for 2027. US GDP is forecast to grow 2.0% annually through 2027, while the Eurozone is expected to expand by 1.4%. Inflation should continue moderating, with US CPI easing to 2.2% in 2026 and Eurozone CPI stable at 2.0%. Consequently, the Federal Reserve's policy rate is anticipated to fall to 3.00% by the end of 2026, while the ECB holds at 2.00%.
Regarding market targets, UBS sets its year-end 2026 S&P 500 target at 7,900 points, STOXX 600 at 700, MSCI EM at 1,610, and MSCI China at 110. Gold is projected to reach $4,000 per ounce, and the USD/CNY exchange rate target is set at 6.90.
The report addresses twenty-five critical questions shaping the macro landscape. While statutory tariffs have decreased due to exemptions and trade de-escalation, the pass-through impact is incomplete. Most tariff costs have been absorbed by corporate profit margins thus far, but are expected to gradually transfer into consumer prices. Furthermore, the report evaluates structural global trends, including the technology cycle, AI productivity gains, fiscal stimulus levels, China's anti-involution policies, and shifting bond yields.