Economic resilience and a boom in profits: towards a narrower path? - 7 september 2026

The economic philosophy of the 2020s marks a break with the past: the era is Keynesian, populist and geostrategic. Public budgets are being mobilized for defense, the energy transition and social stability. These policies are supporting the resilience of global growth (Chart 1), which is also being buoyed by AI, but they are pushing interest rates higher. While the resilience scenario remains the central one, the path is becoming narrower in the face of inflationary, political and AI-disillusionment risks.

Inflation at the heart of the debate
The energy crisis in the Persian Gulf is rekindling the risk of a lasting inflationary shock. Long-term interest rates could then begin to incorporate a persistent risk premium, prompting central banks to react and thereby slow down the economy. However, several factors are limiting this risk: wage moderation and stagnant rents in the United States, the Chinese property slump, and the decline in global purchasing power, which is restraining companies’ ability to raise prices. Moreover, after driving up the price of chips and memory products, AI is beginning to exert disinflationary pressure in services¹. This remains highly uncertain, but a return of US inflation to 2%, or close to it, in 2027 may therefore not be mere wishful thinking (Chart 2).

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¹ Example: US banks have just warned their legal advisers that they will have to lower their fees because AI is now doing a large part of the work.

Fiscal policy: the twin test of credibility
The rise in long-term interest rates does not reflect a risk of sovereign default², but it does raise questions about the relevance of governments’ fiscal choices:
• Stabilisation: highly indebted countries (the United States, Japan, France and the United Kingdom) must prove that they can stabilise their expected public debt trajectory. More than the level itself, it is the trajectory that matters.
• Support: conversely, northern Europe (Germany, the Netherlands and Scandinavia), which injected more than 1% of GDP in 2026, must maintain this support in 2027 without giving in to the austerity reflex.

The AI revolution under real-time scrutiny
In the United States, technology investment is rising by 15% a year and is stimulating activity. Although AI is destroying jobs in certain sectors (marketing, coding), its net impact on overall employment remains limited. Nevertheless, this race for speed requires colossal funding (more than $500 billion in bond issuance expected in 2026), which is adding to pressure on long-term yields. Global financial regulators are concerned about financial concentration: any doubt about the profitability of AI would trigger a major stock market correction, with negative economic consequences.

Europe: between economic resilience and political risks
Despite the energy shock and rising ECB rates, the euro area is holding up. Supported by the Iberian Peninsula, northern fiscal support and solid bank lending, its growth (excluding Ireland) reached +1.3% in Q2 2026. However, several headwinds are looming: the end of NGEU funds for southern Europe, the delayed effect of rate rises, and political uncertainty in France, Germany and Italy. These tensions threaten Europe’s cohesion and strategic assertion. They could also weaken what has so far been a very supportive financial cycle.

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² The CDS (Credit Default Swap) market, which allows investors to insure against sovereign defaults, remains completely calm.

Global stock markets driven by an unprecedented boom in profits
The rise in markets became widespread in 2026, supported by an exceptional surge in earnings per share (median of +15% across developed markets). In addition to the AI effect, this unprecedented profitability is partly explained by the concentration of gains among “superstar” firms across all sectors, and by better control of labour costs. Since share prices have merely tracked the rise in profits, valuations remain reasonable (P/E ratio of 18.2 for the MSCI World in early September). This observation appears partly to invalidate fears of a speculative bubble, but it shifts the main issue for2027: the long-term sustainability of these super-profits.