We asked our researchers what they’ll be keeping their eyes on this year. Here’s what they said, lightly edited for length and clarity.
Gregory Auclair: How foreign pledges to invest in the US evolve. The Trump administration has promised more than $5 trillion of foreign investment in the US. I expect some of that will start to materialize in 2026, with a range of impacts on supply chains, the domestic economy, US diplomatic relations, and partner governments.
Chad P. Bown: All of the non-tariff ways that governments and natural events impact critical supply chains like semiconductors, pharmaceuticals, and critical minerals in 2026.
Olivier Blanchard: Where Europe rises to the challenge.
Kimberly Clausing: How does US macroeconomic data on growth and inflation evolve? Does the AI boom dominate the headwinds created by the tariffs and deportations? How does the budget picture evolve in the US Congress? As the midterms loom later in 2026, does Congress buckle down and govern more effectively, or does congressional dysfunction force another shutdown early in the year? And what does the future hold for global collective action? Can countries pursue a coalition approach on collective problems (like climate change, security, and the trading system) that transcends the Trumpian turn toward transactionalism?
Joseph E. Gagnon: China's surging trade surplus, including in new sectors like autos and green tech, and what it means for traditional auto and tech exporters like Germany, Japan, and Korea. And a possible pop up in US inflation in January, which will be reported in February. Since COVID-19, inflation has tended to be higher in January (and February and March) than in the rest of the year, a pattern that was gradually disappearing but may come back this year because of tariffs. Anecdotal reports suggest that some companies were reluctant to pass through higher tariffs into consumer prices before the holidays but will feel they cannot hold back any longer.
Cullen S. Hendrix: How will Brazil, Colombia, and other left-of-center governments in Latin America navigate relations with the US? The Trump administration's reassertion of the Monroe Doctrine, along with growing geoeconomic fragmentation, portends less strategic and economic autonomy for Latin American governments that had benefitted from globalization and significant Chinese investment. Also the potential return of El Niño conditions in the second half of 2026, which could weigh on global growth, raise food prices, and heighten political instability in parts of the developing world. And if late 2025 trends persist, the US may experience relatively rapid but largely jobless economic growth leading into what will likely be the most fraught midterm elections in over a century. How will the divergence between headline GDP numbers, the health of equities markets, and the increasingly challenging job landscape—especially for recent grads and older workers—shape these elections?
Tianlei Huang: How will the world react to China’s record trade surplus from 2025? Will the US-China trade truce really last a year? China will likely become a high-income country by World Bank standards in 2026. How will that change (or not) global expectations of China’s economy and its role in the world as well as how Beijing defines itself?
Gary Clyde Hufbauer: I'm expecting a jump in consumer price index/personal consumption expenditures index inflation towards 3.5+ percent in the first half of 2026 as tariffs work their way into consumer prices. I'm also expecting a "big boy" summit between China’s president Xi Jinping and President Donald Trump, which broadly confirms US dominance in the Western Hemisphere (Greenland, Venezuela, Panama, and perhaps more) while giving China a fairly free hand in Central Asia, Burma, Cambodia, and Laos.
Jacob Funk Kirkegaard: Developments in Russia-Ukraine War: Not expecting an end to fighting in 2026, as Russia looks unlikely to reduce maximalist war demands. EU long-term budget negotiations 2028–34 begin and in principle should end by ultimo 2026 (likely to run into 2027): Fundamental reform of budget needed, but disagreements over scope and priorities will make this a fiscal knife fight between the member states. Also, EU migration policy trends, as governments seek to blunt far-right political appeal by making potentially material changes to EU asylum, family reunification, and deportation procedures.
Jed Kolko: New official US immigration estimates for 2025 and the annual benchmark revision of payroll growth. These will be released early in 2026 and will help resolve some of the uncertainties about the state of the US labor market. Also new research on the impact of AI on the labor market and the real economy. I suspect these will be ultimately inconclusive but will get much attention and spur both helpful future research and confusion. Finally, the US statistical agencies will remain under extreme stress from both chronic and acute issues, including the dramatic loss of staff and expertise. The data "fog" that Federal Reserve Chair Jerome Powell described during the autumn 2025 government shutdown will be slow to lift.
Nicholas R. Lardy: China’s macroeconomy with a view to understanding whether private consumption expenditures as a share of GDP will continue to rise slowly and the evolving balance of private versus state investment expenditure.
Zhuowen Li: The evolving role of Chinese big tech in 2026. While US hyperscalers race for consumer dominance in chatbots and other AI applications, Chinese platforms appear to be pivoting their spending toward state-aligned hard tech like advanced chips and computing infrastructure to support national strategic priorities. This could mark a transformation from consumer disruptors into utilities for national industrial policy.
Mary E. Lovely: First, in the context of the 6-year review of the United States-Mexico-Canada Agreement (USMCA), how far will the Trump administration push Mexico and Canada to reduce Chinese value added in their domestic production? It is likely that the US will continue to ask for Canada and Mexico to match US tariffs on China, but will they move further towards a customs-union-like agreement, complete with rules of origin to prevent Chinese content imported through other countries? Secondly, I will be tracking Chinese exports and foreign investment for signals as to how supply chains will evolve considering lower-than-expected US tariffs and third-country concerns about Chinese export surges.
Robert Z. Lawrence: Stagnation in US manufacturing, how the rest of the world struggles to deal with Trump’s disruptive leadership, how China’s growing trade surpluses lead to protectionist responses, how AI investments sow the seeds of the next financial crisis.
Cecilia Malmström: The “peace process” in Ukraine and how it develops. Furthermore, I will closely follow if the EU Mercosur free trade agreement is finally signed and how the trade cooperation between the EU and the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) continues after the first exploratory meeting last fall.
Adnan Mazarei: Economic crisis in Iran and political ramifications, economic impact of geopolitical shifts and conflicts in the Middle East, possible debt problems in the US, debt restructurings in low- and middle-income countries.
Marcus Noland: Attention has rightly focused on the Trump administration’s unprecedented imposition of tariff protection. But our modeling suggests that restrictions on the supply of foreign-born workers, either through deportation, voluntary exit, and the drying up of both legal and unauthorized channels of inward migration will have a bigger negative impact on the US economy.
Jeffrey J. Schott: USMCA review/revisions and on the possible broadening and deepening of the CPTPP (with a special focus on South Korea and the EU). The World Trade Organization (WTO) Ministerial will probably not create a crisis but neither will it offer much progress for trade multilateralism. Of course, the BIG trade issue is what happens to US tariff policy once the Supreme Court rules on the Trump administration’s use of the International Emergency Economic Powers Act (IEEPA) to impose tariffs.
Nicolas Véron: Whether the deregulation and rule-of-law erosion in the US will lead to financial instability. There was a glimpse of that scenario in April 2025 in the week following Trump’s tariff announcements on April 2, which he labeled Liberation Day. Similar dynamics may return this year.
Christine Wan: Whether China’s exports are becoming more sophisticated. Mary E. Lovely and I will look first at China’s total exports, then at critical sectors including electric vehicles and advanced electronics, and consider what these shifts mean for China’s economic relations to the world.
Alejandro Werner: Elections in Latin America: Colombia, Peru, and Brazil. Will the Southern cone complete its shift to the right? Also revisions of the USMCA and whether Latin America can bring inflation back to 3 percent; the last leg of the disinflation process is proving more difficult than expected.
David Wilcox: Whether the integrity of US economic statistics remains unquestioned. This will depend on whom the Trump administration nominates as the next commissioner of the Bureau of Labor Statistics, whether that person and the other agency heads are allowed to do their jobs without harassment from senior administration officials, and whether the agencies are given adequate funding to proceed with the urgent work they must undertake to modernize economic measurement in the United States. I’ll also be watching how institutional safeguards protecting the Federal Reserve hold up. This will include the Supreme Court’s ruling on whether the president can fire Fed Governor Lisa Cook, whom the president names to replace Jerome Powell after Powell’s term as chair expires in May, whether Powell stays on the Fed Board as an ordinary member after he’s no longer chair, and whether other members of the board resign before their 14-year terms are up.
Data Disclosure
This publication does not include a replication package.
