Markets content with a 'not too cold' economy

The year began eventfully, with the US using its military strength and economic leverage to achieve President Trump’s foreign policy goals. The Fed receiving subpoenas and military action in Venezuela did not move oil prices and risk assets. But his threats to the sovereignty of a NATO ally sparked temporary volatility, with markets eventually recovering from that scare and US lagging the other regions. Fiscal profligacy and inflation concerns in Japan pushed bond yields up. 

We think economic growth that is neither too hot nor too cold to trigger a recession, along with a high degree of complacency among markets participants, could explain the continued appreciation of risk assets. In this scenario, modest GDP expansion and disinflation is allowing central banks to move cautiously, preserving market liquidity.

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Monica Defend

Monica Defend

Head of Amundi Investment Institute

We expect the ECB to reduce policy rates twice this year, provided consumption remains modest, inflation slows, and wage growth decelerates. We are monitoring how the ECB revises its assessment of inflation, which will give us greater clarity on the bank’s actions.

Monica Defend, Head of Amundi Investment Institute

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Unless otherwise stated, all information contained in this document is from Amundi Asset Management S.A.S. and is as of 9 February 2026. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management S.A.S. and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results.
 

Date of first use: 9 February 2026

Doc ID: 5156533