Asset Management: Monthly Macro Insights - November 2026

Global economic resilience is becoming increasingly costly because AI investment, fiscal expansion, geopolitical fragmentation and elevated asset prices are competing for capital while long-term interest rates remain high.

• Global growth has held up despite the energy shock, but economies linked to technology investment are diverging from energy-importing economies exposed to higher financing and energy costs.
• US consumer spending and capital expenditure have remained resilient, with AI investment accelerating, while lower-income households face higher food, energy, housing and financing costs; the November midterm election results exposed this distributional tension.
• AI could eventually raise productivity and reduce inflation, but the required spending on data centres, semiconductors, electricity generation, grids and skilled labour is already creating bottlenecks and price pressures.
• The Federal Reserve kept its federal funds target at 3.75% to 4.00% in October after a 25-basis-point increase in September, while another increase in December remained possible; the ECB also faced a possible December hike as energy costs threatened growth and inflation expectations.
• Large fiscal deficits, ageing populations, defence spending and energy infrastructure needs are increasing borrowing requirements, with France cited as an example of renewed investor scrutiny and higher sovereign refinancing costs.

Takeaway: Investors must assess whether productivity gains from the AI investment cycle arrive quickly enough in 2027 to offset a structurally higher cost of capital, since a delay could expose the fragility behind current growth and asset valuations.