Dry Powder: The Private Equity Podcast Macro Update: What Could Derail 2026?
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Jan 13, 2026 Karen Harris, Managing Director of Bain's Macro Trends Group, delves into the cracks in the U.S. market and what could derail 2026. She highlights the potential impact of tariffs and warns that a stock market pullback could disrupt recovery. The Fed's balancing act between inflation and recession is discussed, alongside China's strategic resource use and tech ambitions. Harris also examines northern Europe's resilient industries and flags emerging trends in Latin America and India, pointing to global shifts investors should heed.
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Tariffs Hurt But Didn’t Break The Macro
- Tariffs were disruptive but did not produce the large macro hit many forecasted in 2025.
- Karen Harris says tariffs acted as a tax and created drag, but overall trends from prior years continued.
Watch The Stock Market As The Tie Breaker
- Monitor U.S. equity markets closely because their buoyancy underpins the global stability scenario.
- If the stock market loses air, expect that to derail the recovery in deal markets and broader sentiment.
Fed Is Stuck Between Inflation And Growth
- The Fed is balancing two fires: inflation control and avoiding recession, and has settled into a data-dependent holding pattern.
- Existing rates are judged too low for inflation control but too high for growth, forcing a wait-and-see stance.