UBS On-Air: Market Moves UBS Year Ahead 2026 - Escape velocity?
Nov 20, 2025
Jason Draho, Head of Asset Allocation for the Americas at UBS, shares insights on the economic landscape for 2026. He discusses the potential for AI to drive market momentum, examining the need for broader demand beyond current applications. Draho analyzes government debt issues, forecasting more fiscal expansion and its implications. Furthermore, he highlights how political dynamics will influence markets and offers key portfolio positioning strategies, advocating investments in equities, particularly US tech and commodities as potential diversifiers.
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Escape Velocity Framing
- Escape velocity asks if AI, fiscal support and easier policy can free the economy from debt and political drag.
- AI must drive productivity gains to sustain a Roaring Twenties–style growth cycle this decade.
Modest Growth Acceleration
- CIO expects U.S. growth to modestly accelerate from ~1.9% in 2025 to ~2.0% in 2026 as stimulus and easing feed through.
- Household finances remain broadly healthy but lower-income stress is the main risk to broader consumption.
AI Investment Needs Broader Demand
- AI investment by hyperscalers has surged and could approach half a trillion dollars, driving markets so far.
- Continued momentum requires belief that AI demand extends beyond chatbots to agentic AI and physical applications.