Goldilocks With Risks: Markets Supported but Fragile

DWS’s quarterly outlook assesses global markets against a backdrop of resilient growth, moderate inflation and cautious central bank policy.

• The macro environment resembles a “Goldilocks” scenario: steady growth, easing inflation and stable policy rates could support both equities and bonds over the coming year.

• Earnings growth is expected to remain the main driver for equities, with developed markets projected to grow 6–12% and emerging markets potentially reaching 20%.

• Major risks include geopolitical tensions, sovereign debt sustainability and the unpredictable economic impact of artificial intelligence.

If the economic cycle remains intact, markets may continue climbing—but the report explores where the next shocks could emerge.