Eric Lascelles offers an optimistic picture of the year ahead, offers key metrics that will affirm or challenge his predictions
RBC Global Asset Management (GAM) has a relatively optimistic outlook for 2026. Their view of the Canadian, US, and global economies for the next year rest on a view that 2025 was an ‘inflection year.’ The mixture of fiscal stimulus, interest rate cuts, productivity investments, and the ongoing adoption of AI all undertaken in 2025 can all help contribute to a more normal and improved economic year in 2026. Eric Lascelles, Managing Director and Chief Economist at RBC GAM, explained why he sees a positive year ahead.
In sharing his outlook, Lascelles emphasized the macro developments and events he’ll be watching for most closely. He outlined, too, the metrics by which he will gauge his own outlook. He explained how these metrics might be used to measure economic progress and how advisors can use those same metrics to contextualize the news for their clients.
“We are hoping and expecting that 2026 will be a somewhat improved year economically. And that's a statement that I can make with some conviction for Canada, but we're hopeful also global growth and US growth get somewhat faster as well. The central logic is that we have central banks that have been cutting rates, and that's a tailwind for the next year. There's a fair amount of fiscal stimulus swirling around in Canada, the US, and other notable developed economies like Japan and Germany,” Lascelles says. “We are also at this fascinating moment with artificial intelligence which can be applied in a number of ways economically.”
Lascelles outlined the different ways he’ll be watching AI adoption and progress to assess its impact on economic growth. The first, and one of the most notable, will be the continuation of capital expenditure by AI hyperscalers on data centers and other AI infrastructure. Lascelles notes that cap-ex on AI was a huge driver for US growth in 2025 and that 2026 is unlikely to see investment at a similar rate. Nevertheless, double-digit growth is still forecast for AI cap-ex, and the level of that investment may play a role in US growth outlooks.
What may also prove telling in 2026 is the realization of productivity gains through these AI investments. If increased productivity is the goal behind is cap-ex, Lascelles notes, then the realization of that goal should result in economic gains that extend beyond just the United States and, from an equity standpoint, the magnificent seven. Lascelles notes the consensus on AI’s productivity benefits being realized in 2026 is not yet firm, but he argues that micro-level data already indicate some larger productivity gains in geographies and industries that have led AI adoption.
From a Canadian perspective, Lascelles will also be watching renegotiation of the USMCA trade agreement very closely. He believes that this will end up with a very similar deal to its current state, with some caveats reflecting sector tariffs. He believes many sector tariffs will remain in place, but his firm believes that average tariff rates should not go up significantly. There may be rhetoric-induced volatility next year, however, as bellicose talk about trade and “tearing up” the agreement result in short spikes of market uncertainty.
Beyond tariffs, Lascelles will also be watching for moves by central banks, which might include further cuts. He’ll also be paying close attention to employment numbers in North America which could tell the story of economic progress. He notes that in the US and Canada, there is very little population growth and immigration ongoing, which he believes should prompt observers to watch unemployment rates more closely than job creation numbers. He notes that due to the US government shutdown, some data from that country has been more muddied, prompting the wider use of other sources, such as ADP payroll numbers.
Lascelles will also be paying close attention to global trade volumes which, despite US tariffs, have held up well in 2025. Despite what he describes as a “hole carved out of the middle” of global trade, he sees useful progress being made in regional trading blocs and economic realignments.
Credit markets are another “truth teller” in Lascelles’ view, and can be a leading indicator for broader markets. Even if narrow spreads limit the opportunity for investors to make significant gains, he argues that it could present the potential for a steadier economy ahead.
There are risks to his more optimistic outlook, among them being the high degree of sovereign debt in the developed world. The risk that AI does turn out to be a bubble, which Lascelles says is not his base case, could also manifest in greater weakness next year. There are also risks from China, which still show shakiness in its consumer spending and its real estate market. Despite Chinese progress on new technologies, weakness in the world’s second-largest economy could be less positive.
For advisors and their clients seeking to make sense of a changing world next year, Lascelles believes four metrics can sit at the core of their analysis. The first is unemployment rates, which offers insight into how well the economy is holding together. The second is trade, which may tell if tariffs have had a more lagged impact. The third is AI cap-ex and the fourth is productivity growth, especially the impact of AI on productivity.
“If we're generating productivity growth that's twice normal, we should expect real wages to rise a lot more quickly, we should expect corporate profit growth to be faster, we should therefore validate higher stock market valuations,” Lascelles says. “It would be a complete game changer and be the engine for investors over a period of a few decades, potentially.”
