Interest rates, company earnings and the new US Federal Reserve chair are set to dominate the investment outlook for the second half of 2026, according to GSFM and fund manager partners Auscap Asset Management, Payden & Rygel and Man Group.

GSFM investment strategist Stephen Miller says 2026 started with expectations of sticky inflation, gradual monetary easing and elevated bond yields combining with decelerating growth into a “stagflation-lite” scenario.

“At the start of the year many macro analysts maintained a cautious view of the likely investment landscape for 2026,” Miller says.

“The onset of the Iranian conflict earlier this year only reaffirmed that guarded view, and the recent reescalation may reinforce it again.”

However, Miller says US inflation has been slightly less than feared, although conflict-related increases in oil prices have added to price pressures. Markets are now pricing in one to two further Fed rate rises by year-end.

Read the media release.

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