A new global survey says we may get a different mix: strong growth and stubborn inflation at the same time.
That combination matters a lot for anyone who owns bonds.
What the poll found
A Reuters poll of more than 500 economists found that 2027 inflation forecasts were raised for 31 of 50 economies. The main reason is oil above $100 a barrel, which keeps price pressures alive.
Growth forecasts were also raised, for 23 economies. Global growth is now forecast at 3.0% in 2026 and 3.2% in 2027, and the poll credits AI investment for supporting that resilience.
So the economy is holding up, and inflation is not going away.
Strong growth and high inflation are a hard pair
When growth slows, the Fed can cut rates, and bond prices tend to rise. When growth is solid and inflation is rising, the Fed has less room to help. It may have to keep rates high or raise them.
That appears to be the situation.
Oil is the swing factor, and it’s driven by the Middle East conflict. Possible military action against Iran remains an overhang. If oil stays above $100, headline inflation stays elevated.
Where the Fed and the bond market stand
The Fed meets today, and the statement comes. Our Fed Tracker sees a low probability of a fed hike at this meeting, but likely to see a quarter point hike at the December meeting,
Bottom line
A resilient economy with sticky inflation is the kind of environment where bond investors have to pay attention to duration and inflation risk, not just yield. Today’s yields are attractive, and that’s an opportunity. But the risk is that rates stay high or rise from here, and the longer the bond, the more that matters.