Northern Trust’s weekly commentary examines three pressure points shaping 2026: U.S. housing affordability, China-Japan trade tensions, and the growing signal from prediction markets
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U.S. housing remains constrained by low turnover and structural supply barriers; policy ideas—from GSE MBS purchases to zoning reform—may ease margins but won’t quickly restore affordability.
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China-Japan tensions carry material trade and supply-chain risks, yet deep economic interdependence reduces the likelihood of full-scale retaliation.
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Prediction markets are gaining credibility as real-time probability gauges, sometimes outperforming traditional forecasts.
Are these frictions cyclical noise—or early signals of structural change? The full commentary connects the dots.
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