Policy Signals Diverge as Markets Reprice the 2026 Outlook

The weekly perspective reviews how shifting policy signals and uneven data are reshaping global macro expectations.

• In the US, the Fed held rates but growing dissent and labour-market softening strengthen the case for cuts later in 2026, even as Kevin Warsh’s nomination injects a more hawkish perception.

• Canada and Europe show steadier trajectories, with inflation easing and tentative growth stabilisation, while Japan’s yen volatility highlights fiscal politics rather than monetary urgency.

• Australia stands out as the near-term risk point, where markets price a hike despite signs that underlying inflation pressures are moderating.

How should investors navigate a world where policy direction matters less than timing and credibility? The full note unpacks the cross-currents shaping rates, currencies, and risk assets.