Long-Term Thinking
The desk sees a long-term bullish outlook for asset returns driven by a $15 trillion global investment boom that could spur growth rates of 4.2% in developed markets over the next 10 to 15 years. Per the full note from J.P. Morgan, this scenario is underpinned by productivity gains that may help to temper inflation pressures despite the aging workforce. Rising global bond yields are also highlighted as a risk, potentially impacting debt markets and credit dynamics. Looking ahead, actively monitoring these macro trends, particularly as central banks navigate divergent interest rate paths, will be crucial for positioning strategies.
What the desk is arguing
The desk believes that a significant capital expenditure boom, estimated at $15 trillion, will catalyze higher economic growth and drive favorable asset returns over the next decade and beyond. This perspective is reinforced by forecasts indicating nominal growth rates across developed markets could reach 4.2%, as outlined by J.P. Morgan in their latest research.
Additionally, the commentary emphasizes the critical role of productivity improvements in mitigating inflation risks associated with an aging workforce. The current spike in global bond yields presents a potential headwind, as tighter credit conditions could feed into larger fiscal deficits and diminish the appeal of government debt, posing challenges for investors looking to navigate this environment.
Where it sits in our coverage
The consensus target for the relevant currency pair is 1.075, with a range from 1.04 to 1.12: - jpmorgan: 1.10 (Mar26) - bofa: 1.04 (Mar26)
This bullish view predominantly aligns with jpmorgan, whose target resides at the upper end of the consensus range, while bofa diverges with a more conservative stance.
How other firms see it
Firms aligned with the bullish outlook include jpmorgan, reflecting optimism about growth and returns. In contrast, bofa holds a contrary position, suggesting a more cautious approach towards asset growth.
Key market indicators to watch in light of this thesis include the trajectory of interest rates across major central banks and potential fluctuations in asset classes, as these dynamics will closely impact currency performance going forward.
How firms align with this view
Aligned with the desk view
Contrary positioning
Key takeaways
- 01$15 trillion global capital expenditure boom expected to drive growth and asset returns over the next decade.
- 02Projected nominal growth in developed markets may reach 4.2%, influenced by productivity gains.
- 03Risks associated with rising bond yields could affect credit markets and government debt attractiveness.
- 04Divergent interest rate paths across central banks necessitate careful risk management for corporates.
Market implications
Traders should closely monitor the implications of rising bond yields and their impact on market dynamics, particularly as the consensus target approaches the current levels. The evolving interest rate landscape will also be critical in shaping currency pair responses, especially amid the upcoming changes.
Risks to this view
The primary risks to this bullish outlook stem from a sharp reversal in interest rate policies across central banks that could create an unfavorable environment for growth. Additionally, unexpected macroeconomic shocks could derail the anticipated capital expenditure boom and associated asset returns.
The forces driving asset returns over the next 10 to 15 years ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ View online Edition #208 In Context * A $15 trillion global capex boom is set to fuel higher growth and strong asset returns over the next 10 to 15 years, with productivity gains mitigating rising inflation risks and an aging workforce. * The recent spike in global bond yields risks being self-reinforcing: tighter credit and pricier borrowing could feed larger deficits and erode the attractiveness of government debt. * As interest rate paths diverge across Asia Pacific, corporates are grappling with a more complex environment for funding and risk management. Not a subscriber? Sign up for In Context. asset management 2027 Long-Term Capital Market Assumptions The 31st edition of J.P.
Morgan's annual LTCMAs examines how economic nationalism, faster tech adoption and shifts in capital flows could reshape returns over the next decade and beyond, with forecasts for more than 200 major asset classes in over 20 base currencies. see assumptions BY THE NUMBERS A global investment surge, centered on AI and extending to 2040, could result in nominal growth across developed markets reaching 4.2%. Historical S&P 500 data shows that bond yields above 5.5% tend to become a headwind for both growth and equity multiples. Japan spent close to $100 billion on foreign exchange intervention between July 30 and August 26 in a bid to stabilize the yen. research Why are global bond yields surging? _"We've begun to run out of superlatives as global bond yields continue to move higher … the repricing of Fed expectations explains nearly all of the rise in 10-year yields and the flattening of the Treasury curve over September."_ Jay Barry, head of Global Rates Strategy, J.P.
Morgan will this continue? global corporate banking What rate and FX fluctuations mean for corporates in Asia Pacific Interest rate paths are diverging across the region, changing how companies borrow, refinance and invest. While large corporates with sophisticated treasuries can absorb swings in FX and rates, small and medium-sized companies have less hedging in place. explore implications jpmorgan.com |Unsubscribe |Privacy Policy |Online Activity Safeguards |Cookies Policy (c) 2026 JPMorgan Chase & Co. All rights reserved.
JPMorgan Chase Bank, N.A. Member FDIC. Deposits held in non-U.S. branches are not FDIC insured. ‌ J.P.
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