08 JANUARY 2026
The chart below contains some of the most important variables to watch in 2026.
It shows the market-derived figures for US inflation expectations for the next 2, 5 and 10 years.
These are essentially the consensus views on where inflation is heading over the medium and longer-term.
And they have a huge influence on how the Federal Reserve sets monetary policy.
Providing inflation expectations are not surging higher (like in 2021), the Central Bank typically adopts an accommodative stance and risk assets tend to fare well.
Simply put, if the measures stay broadly where they are, markets should remain well bid this year.
However, a “risk off” phase becomes far more likely if inflation concerns resurface.
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