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Global Asset Allocation Viewpoints

Read our committee’s tactical views, positioning, risks, and opportunities across global assets.

January 2026

Outlook
  • We maintain a balanced view across global risk assets and are neutral equity. Despite extended valuations, earnings trends and economic growth remain favorable, with the latter supported by fiscal and monetary policies across most regions.
  • U.S. economic growth remains resilient fueled by AI-driven capital spending and supportive fiscal and monetary policies, although softening labor market warrants monitoring.
  • Markets outside the U.S. supported by fiscal spending, notably in Europe and Japan, lower inflation and moderating trade risks.
  • Key risks to global markets include narrowness of AI trends supporting earnings, economic growth and markets, sticky inflation, potential for quickening labor market declines, and ongoing geopolitical tensions.

This monthly report from T. Rowe Price's Asset Allocation Committee delivers timely insights into the outlook for global markets and investment positioning. Despite elevated valuations, the committee maintains a balanced, neutral stance on equities, citing ongoing earnings strength and supportive fiscal and monetary policies. The report highlights the resilience of U.S. economic growth—driven by AI investment—even as labor market softness warrants attention. Outside the U.S., Europe and Japan are benefiting from fiscal stimulus and lower inflation, while emerging markets see support from policy and AI demand. Risks include persistent inflation, potential labor market declines, and geopolitical tensions. T. Rowe Price’s tactical allocation favors small-cap equities and real assets, maintains an underweight to bonds given inflation and funding pressures, and keeps an overweight to cash for flexibility.


 

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Global Asset Allocation Viewpoints

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IMPORTANT INFORMATION

This material is being furnished for general informational and/or marketing purposes only. The material does not constitute or undertake to give advice of any nature, including fiduciary investment advice. Prospective investors are recommended to seek independent legal, financial and tax advice before making any investment decision. T. Rowe Price group of companies including T. Rowe Price Associates, Inc. and/or its affiliates receive revenue from T. Rowe Price investment products and services. Past performance is not a guarantee or a reliable indicator of future results.

This information is not intended to reflect a current or past recommendation concerning investments, investment strategies, or account types, advice of any kind, or a solicitation of an offer to buy or sell any securities or investment services. The opinions and commentary provided do not take into account the investment objectives or financial situation of any particular investor or class of investor. Please consider your own circumstances before making an investment decision.

Information and opinions presented have been obtained or derived from sources believed to be reliable and current; however, we cannot guarantee the sources’ accuracy or completeness. There is no guarantee that any forecasts made will come to pass. The views contained herein are as of the date noted on the material and are subject to change without notice; these views may differ from those of other T. Rowe Price group companies and/or associates. Under no circumstances should the material, in whole or in part, be copied or redistributed without consent from T. Rowe Price.

Risks: All investments are subject to risk, including possible loss of principal. Stock prices can fall because of weakness in the broad market, a particular industry, or specific holdings. Fixed-income securities are subject to credit risk, liquidity risk, call risk, and interest- rate risk. As interest rates rise, bond prices generally fall. Diversification does not assure a profit or protect against a loss in a declining market.

USA: T. Rowe Price Associates, Inc. © 2025 T. Rowe Price. All Rights Reserved. T. ROWE PRICE, INVEST WITH CONFIDENCE, the Bighorn Sheep design and related indicators (see troweprice.com/ip) are trademarks of T. Rowe Price Group, Inc. All other trademarks are the property of their respective owners.

202601-5113749

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