Global Outlook September 2026
In this Global Outlook update, Bill Dinning, Chief Investment Officer, discusses the market impact of the US Federal Reserve's first interest rate rise in three years. While higher energy prices and geopolitical tensions continue to drive inflation, he believes the strength of the US economy, with growth running well above trend, justifies the Fed's decision. He also notes that the move should help reinforce confidence that inflation can be brought under control.
Looking beyond the US, Bill highlights the contrast between America and Europe, where growth remains much weaker despite similar inflationary pressures. He questions whether further rate rises in the UK and Europe would be effective in tackling energy-driven inflation and warns they could hinder already sluggish growth.
Despite these challenges, he remains optimistic about the investment outlook, pointing to robust corporate earnings growth across sectors and regions, and explains why W1M continues to favour equities within its portfolios.
Key takeaways
- The US economy remains resilient despite higher interest rates
Strong economic growth and persistent inflation have supported the Federal Reserve’s decision to raise rates, while the outlook in the UK and Europe remains considerably weaker. - Higher energy prices remain a key challenge for inflation and growth
Rising oil and natural gas prices are adding to inflationary pressures globally, but further rate rises in the UK and Europe could put additional pressure on already sluggish economic growth - The outlook for global equities remains positive
Corporate earnings are expected to remain strong across a broad range of sectors and regions, supporting the view that global equity markets can continue to offer opportunities despite geopolitical and economic uncertainty.
Glossary
Federal Reserve (Fed): The central bank of the United States, responsible for setting monetary policy, including interest rates.
Interest rates: The cost of borrowing money. Central banks can raise rates to help control inflation, although higher rates can also weigh on economic growth.
Inflation: The rate at which the prices of goods and services rise over time, reducing the purchasing power of money. The video highlights energy prices as a significant source of current inflationary pressure.
Overweight equities: An investment position where a portfolio holds a larger proportion in shares than its usual or benchmark allocation, reflecting a relatively positive view of equity markets.
This material is provided for informational purposes only and does not constitute investment advice or a recommendation. The views expressed reflect current market conditions and are subject to change without notice.
All materials have been obtained from sources believed to be reliable, but their accuracy is not guaranteed. There is no representation or warranty as to the current accuracy of, nor liability for, decisions based on such information.
Investment strategies presented are not suitable for all investors and do not represent the experience of other clients. Results may vary and are subject to change based on market conditions and individual circumstances. Investors should consult their financial and tax advisors to assess the suitability and risks of any investment.
Portfolios may include investments in illiquid assets, securities subject to counterparty risk, and instruments sensitive to changes in exchange or interest rates. Derivatives such as futures, options, structured notes, and contracts for differences may be used for risk management or investment purposes but may also involve a higher level of risk and may not be suitable for all investors. There is a risk of loss and of counterparty default on such instruments.
