Wednesday, June 3

Goldman Sachs, the OECD and Morgan Stanley released contrasting 2026 outlooks that matter for policy expectations and asset prices. Goldman sees “sturdy” global growth — global GDP +2.8%, U.S. +2.6%, China +4.8% and euro area +1.3% — with easing developed-market inflation and lower policy rates. The OECD is notably more cautious: it expects global growth to slow to 2.9% in both 2025 and 2026, flags U.S. growth of 1.5% in 2026 and China at 4.3%, and explicitly warns that trade-policy uncertainty, tighter financial conditions and tariffs are weighing on trade, investment and confidence. Morgan Stanley sits between those views (global GDP ~3.2% in 2026; U.S. ~1.8%; euro ~1.1%) and projects a gradual decline in inflation that allows central banks to move rates lower over time.

The divergence changes the risk map: the upside growth/early-easing scenario priced by Goldman supports cyclicals, commodities and duration-friendly positioning; the OECD view argues for a more defensive stance if trade and financial tightness persist. For portfolio teams, the actionable takeaway is that rate and earnings assumptions hinge on which narrative — stronger cyclical momentum or a growth drag from trade/financial tightening — proves correct.

The Treasury Borrowing Advisory Committee (TBAC) statement is the only clearly time‑stamped item in the available material and characterises 2025 as a ‘low hires/low fires’ environment. That phrasing implies reduced labour-market churn — fewer new hires and fewer separations — which, if persistent, tends to blunt wage growth and remove upward pressure on core inflation.

While the TBAC snippet lacks granular, dated follow-up, the conceptual implication is straightforward: lower turnover weakens the argument for sustained higher-for-longer policy and supports the narratives (like Goldman’s and Morgan Stanley’s) that envisage easing inflation and eventual rate relief. Market desks should treat the TBAC wording as a conditional input to rate and inflation scenarios rather than a decisive signal on its own, given the absence of contemporaneous labour-detail in the available sources.