North American institutional investors and private market managers expect the US economy to continue growing in 2026, but say markets are entering a more volatile and selective phase, according to new research commissioned by Ocorian.
The survey of US and Canadian investors overseeing about $16.8 trillion in assets found confidence in economic momentum remains strong, even as respondents prepare for valuation resets, persistent inflation and shifting policy conditions. Nearly all respondents (98%) expect a correction in US equity markets during 2026, reflecting concern about elevated valuations rather than an expectation of an outright downturn.
Inflation emerged as the dominant macroeconomic risk. All respondents reported some level of concern, with 44% describing themselves as very concerned. While 48% expect inflation to rise in 2026 and another 15% expect it to remain flat, only 18% believe inflation will return to the Federal Reserve’s 2% target next year, with most pushing that expectation into 2027 or later.
Despite those pressures, growth expectations remain relatively optimistic. About half of respondents said they align with White House projections of US gross domestic product growth of 3% to 4% in early 2026, placing investor expectations above prevailing consensus forecasts. The report describes this combination of confidence and caution as “tempered optimism.”
Recession risk is seen as elevated but not inevitable. Nearly six in 10 respondents believe there is at least a 40% chance of a US recession in 2026, higher than long-term norms. However, investors said they are treating recession as a scenario to plan for rather than a base-case outcome, continuing to deploy capital selectively where risk-adjusted opportunities exist.
Expectations around monetary policy reflect a similar pragmatism. Almost all respondents anticipate more than one Federal Reserve interest rate cut in 2026, with more than half expecting three or more cuts. At the same time, most believe the appointment of a new Federal Reserve chair by the Trump administration would increase political pressure on the central bank, potentially skewing policy toward growth support even if inflation remains above target.
The study also found differences in approach among investor groups. Fund managers reported focusing on execution, deployment and exit opportunities, while asset owners emphasized governance, liquidity management and downside protection. Both groups, however, remain committed to private market strategies.
Vincent Calcagno, head of US growth at Ocorian, said investors are adjusting rather than retreating. “The expectation of continued growth sits alongside a clear-eyed assessment of risk, valuations and policy uncertainty,” Calcagno said.
