Beyond Markets Secular Outlook 2026: A CIO Perspective on the Forces Shaping the Decade Ahead
Dec 18, 2025
In this engaging discussion, Yves Bonzon, Group Chief Investment Officer at Julius Baer, dives into the forces shaping the next decade. He analyzes the normalization of interest rates and the implications for governments facing rising debts. Yves addresses the potential of the AI supercycle and its sustainability compared to the dot-com boom. He also warns of geopolitical risks, particularly stranded assets in the wake of the Ukraine conflict, while providing insights on constructing resilient portfolios amidst these challenges.
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State-Sponsored Capitalism Rising
- The dominant secular trend is the end of neoliberalism and the rise of state-sponsored capitalism.
- This shift means governments increasingly shape resource allocation and asset prices beyond market forces.
Higher Normalized Interest Rates
- Yves expects interest rates to normalize around 4–5% for much of the decade, reflecting ~2% real rates plus inflation.
- That higher rate regime raises government debt servicing costs and reshapes financing conditions for the economy.
Debt, AI Capex And Rising Financing Pressure
- Government debt has surged while private deleveraging occurred, so higher rates greatly increase fiscal burdens.
- Rising AI capex will further push financing costs and compete with government refinancing needs.