10.21.2026
LESSONS FROM THE PAST VIEWS FOR THE FUTURE
We present our new economic growth and inflation modelling frameworks we use to update our baseline forecasts.
Despite our incorrect assumptions about the intensity and duration of the war in the Middle East, our growth and inflation forecasts published shortly after the outbreak of the conflict proved reasonably accurate, reinforcing our long-standing view that the underlying trend remains disinflationary albeit slow as supply shocks keep getting in the way. Looking ahead, we have decided to decouple our macro baseline from any specific assumptions about how the US-Iran conflict may evolve as neither the US nor Iran appears willing to back down unless meaningful concessions are made by both sides. The decision coincided with a shift from a predominantly judgement-based energy forecasting approach to a predominantly quantitative one. To ensure a smooth transition between the two approaches, our forecasts for Q4 2026 retain some elements of the forecasting approach used in our previous, predominantly judgement-based macroeconomic scenario, which had delivered relatively accurate projections.
Growth:
- In the US, our updated baseline remains broadly unchanged. We continue to envisage a growth path that hovers around potential through the end of 2027, suggesting that the US economy remains well positioned to absorb the shock without a meaningful deterioration in economic activity.
- In the EA, we have modestly lowered our annual real GDP growth forecast for 2027 to 1.2%, a 0.1 pp downward revision relative to our previous baseline.
Inflation:
- In the US, we now expect year-on-year core PCE inflation to remain at 3.0% in Q4 2026, compared with 2.7% in our previous mechanically adjusted baseline. Thereafter, in line with our prior expectations, favourable base effects should drive a sharp decline to 2.4% in H1 2027, unchanged from our prior forecast, before inflation eases further to 2.15% in H2 2027, slightly below our previous baseline of 2.25%. On an annual average basis, we continue to forecast core PCE inflation to average 2.3% in 2027.
- In the EA, we now expect core HICP inflation to remain stable at 2.5% y/y in Q4 2026, compared with 2.2% in our previous baseline. In H1 2027, core HICP inflation is now projected to moderate only marginally to 2.4% y/y, versus 2.2% previously, before easing further to 2.2% in H2 2027, compared with 2.1% in our prior baseline. On an annual average basis, we now forecast core HICP inflation at 2.3% in 2027, up from 2.1% in our previous baseline.
Monetary policy:
- Our new macro framework leaves the Fed outlook broadly unchanged, with 1-2 additional hikes by March 2027 but fewer than markets expect. For the ECB, amid stickier core inflation we continue to expect the ECB to adopt an easing bias in H2 2027, although the actual number of rate cuts it will deliver will depend on the pace at which core inflation converges towards the target.
Fabio Fois
Head of Investment Research & Advisory
Matteo Gallone
Macroeconomist
Mattia Banin
Junior Macro Analyst
Chiara Cremonesi
Senior Rates Strategist
Marketing material for professional clients or qualified investors only.
This material does not constitute an advice, an offer to sell, a solicitation of an offer to buy, or a recommendation to buy, sell, or hold any investment or security or to engage in any investment strategy or transaction. ANIMA can in no way be held responsible for any decision or investment made based on information contained in this document. The data and information contained in this document are deemed reliable, but ANIMA assumes no liability for their accuracy and completeness.
ANIMA accepts no liability whatsoever, whether direct or indirect, that may arise from the use of information contained in this material in violation of this disclaimer and the relevant provisions of the Supervisory Authorities.
This is a marketing communication. Please refer to the Prospectus, the KID, the Application Form and the Governing Rules (“Regolamento di Gestione”) before making any final investment decisions. These documents, which also describe the investor rights, can be obtained at any time free of charge on ANIMA website (www.animasgr.it). Hard copies of these documents can also be obtained from ANIMA upon request. The KIDs are available in the local official language of the country of distribution. The Prospectus is available in Italian/English. Past performances are not an indicator of future returns. The distribution of the product is subject to the assessment of suitability or adequacy required by current regulations. ANIMA reserves the right to amend the provided information at any time. The value of the investment and the resulting return may increase or decrease and, upon redemption, the investor may receive an amount lower than the one originally invested.
In case of collective investment undertakings distributed cross-border, ANIMA is entitled to terminate the provisions set for their marketing pursuant to Article 93 Bis of Directive 2009/65/EC.
