00:00 Speaker A
TD Security is out with its global outlook for 2026, expecting growth to hold up relatively well. Let’s talk about what all this means for the markets, particularly when we talk about FX. Joining me now, Jayati Bharadwaj, a TD Securities FX and Macro strategist. Thanks for being here.
00:16 Jayati Bharadwaj
Thank you so much for having me.
00:18 Speaker A
So, let’s talk about the big picture backdrop here for the economy, right? Because we keep talking about the K-shaped economy. We haven’t had any economic data here in the US for a bit. Um, and so what do you think that the end of this year going into next year is going to look like?
00:33 Jayati Bharadwaj
I think we’re definitely at a very pivotal point in markets, you know, there’s definitely been a lot of conversations around what the next Fed path, Fed Fed move is, what is the state of the economy. Uh our view is that the global growth lands landscape actually looks a lot better than people were fearing at the beginning of the year. The world economy has been able to handle tariff shocks relatively resiliently. A lot of monetary and fiscal easing has definitely held it up, which we think should continue to next year, which should continue to hold the global growth backdrop relatively resilient.
01:02 Jayati Bharadwaj
There’s obviously going to be times when certain economies do better than others, but the pivotal focus now remains on the US. Europe and China, the other big big economies have been holding up much better than feared. In fact, we got headlines overnight about Russia, Ukraine potentially inching closer to the trade deal, which also takes away the tail risk away from Europe. China shockingly has been doing great, exports year-on-year have been strong. In fact, they’ve been able to take a much proactive, stronger negotiating stance with the US purely because their economy is doing relatively well.
01:33 Jayati Bharadwaj
The US is the only big question mark now where we are headed. In that, you know, our view is that we do have some US underperformance relative to its potential in the first half of next year, which is where we’re also off consensus and calling for a more aggressive path of fed easing compared to what’s priced by markets and our market peers. Uh that is what we think is needed to then shield the economy and bring it back to potential in the second half of the year.