Energy Shocks and AI Capex Shape the Global Macro Path

Overview

This issue of The Global 360 centers on updates to the global macro outlook around energy prices, AI capital expenditure, the inflation path, and central bank policy. The report says the midyear outlook is titled A Fluid Outlook, mainly because both energy prices and AI diffusion create a high degree of uncertainty. In the near term, risks tied to the Strait of Hormuz, the pace of oil-flow recovery, and how oil prices transmit into inflation and growth are the key variables determining the distribution of global economic scenarios. Excluding energy-price volatility, global growth remains supported by U.S.-driven AI capital expenditure, resilient consumer spending, and the Asian industrial investment cycle.

Core views

The report's core view is that global growth still has support, but the risk distribution is wider. In the U.S., investment spending, especially AI-related capex, is strong; consumption growth is being pressured by energy prices, but the underlying trend remains resilient; and inflation is expected to slow again in the second half of the year. In the Euro area, the energy shock leaves it facing both slower growth and upward inflation pressure; the ECB already hiked in June and may still hike another 25 bp in September. In Japan, the BoJ has raised rates to 1%, underlying inflation risks are higher than before, and if Middle East tensions ease, the probability of earlier normalization rises. In China, external demand, exports, and capital expenditure support growth, but weak property, consumption, and employment-income pass-through increase the need for policy fine-tuning.

Analysis framework

The report uses a global-and-regional macro scenario framework, incorporating oil-price shocks, AI capital expenditure, tariff pass-through, consumer resilience, the investment cycle, labor markets, and central-bank reaction functions into a unified assessment. For major economies, the report offers judgments across three dimensions—growth, inflation, and monetary policy—and supplements the outlook with central-bank policy-rate tables and meeting calendars.

Methodology notes

• Macroeconomic scenario analysisGlobal growth scenarios driven by energy prices and AI

  Construct scenario distributions for growth upside and inflation upside risks using the oil-price path and the intensity of AI capital expenditure.

  The report argues that the main upside scenario for U.S. growth is driven by AI capital expenditure and the diffusion of the investment cycle, while the main downside scenario comes from persistently high energy prices weighing on consumption, real income, and inflation expectations.

• Regional macro triadGrowth, inflation, and monetary policy framework

  Assess growth momentum, inflation pressure, and central-bank policy reactions separately for regions such as the U.S., Euro area, Japan, and China.

  This framework is used to identify the dominant tension in each region; for example, the U.S. has investment stronger than consumption, the Euro area faces stagflation-like pressure, Japan faces rising inflation and normalization timing issues, and China has strong external demand alongside weak domestic demand.

• Policy path forecastingCentral-bank rate and meeting-calendar tracking

  Evaluate the global rate path by combining current policy rates, next meeting dates, expected actions, and the timing of the next policy move.

  The report lists the current policy rates, next meetings, and expected policy actions for major G10 and emerging-market central banks to help judge the global liquidity and rate environment.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Crude oil and energy-related assets

  Core macro shock variable

  Strengths

  If supply gradually recovers and oil prices fall, inflation pressure should ease and the global growth backdrop should improve.

  Weaknesses

  If Middle East disruptions or the risk premium persist, energy prices will squeeze real income and push headline inflation higher.

  Comparison

  Compared with the growth upside from AI capital expenditure, energy prices have a more direct impact on inflation upside and growth downside.

  Risks

  Oil prices stay above the base case for too long, Strait of Hormuz disruptions continue, and energy-price pass-through to core inflation and wages intensifies.

• U.S. macro and dollar rates

  One of the sources of global growth support

  Strengths

  AI capital expenditure, consumer resilience, and investment-cycle spillovers support growth in 2026-2027.

  Weaknesses

  Energy prices may weigh on consumption, disposable income is under pressure, and services inflation carries upside risk.

  Comparison

  The U.S. is more resilient than the Euro area on growth, and the Fed's policy path is also more inclined to wait and see than the ECB's.

  Risks

  Stronger-than-expected oil pass-through, overheated demand, or a reacceleration in the labor market could make inflation stickier than expected.

• Euro area macro and euro rates

  Exposed to growth downside and inflation upside under the energy shock

  Strengths

  German fiscal spending, EU funds, defense, and digital capex provide some offset for investment.

  Weaknesses

  Weak external demand, China competition, and energy-cost pressure are eroding exports and growth momentum.

  Comparison

  Compared with the U.S., the Euro area is closer to a low-growth, high-inflation mix, and the market may be underestimating growth risk.

  Risks

  Persistently high energy prices, wage catch-up mechanisms extending inflation, and insurance-rate hikes from the ECB further suppressing demand.

• Japan macro and yen rates

  A watch item for monetary-policy normalization

  Strengths

  Structural labor shortages, wage growth, and investment in labor-saving technologies support nominal growth.

  Weaknesses

  Near-term activity is slowing, terms of trade are weakening, and a post-front-loaded export pullback may weigh on growth.

  Comparison

  Japan's oil-price shock is more of a growth risk than a pure inflation risk, but the BoJ is more focused on the possibility that underlying inflation exceeds 2%.

  Risks

  Nonlinear spillovers from Middle East disruptions, core inflation above 3%, and a faster-than-base-case BoJ hiking pace.

• China macro and industrial-chain assets

  Divergent growth driven by external demand, exports, and capital expenditure

  Strengths

  The global AI and energy-capex cycles support exports and industrial investment, while new-economy sectors remain resilient.

  Weaknesses

  Property contraction, weak consumption, and sluggish labor-income growth limit domestic-demand spillover.

  Comparison

  China's growth is more supported by external demand and supply-side investment than the Euro area, but the self-reinforcing loop in domestic demand remains weak.

  Risks

  K-shaped divergence deepens, external demand rolls over, policy fine-tuning is insufficient, and employment/income pass-through to consumption remains weak.

Key data

• Crude oil base caseBack to $90/bbl by year-end, with further declines in 2027If the oil dislocation lasts longer, growth and inflation risks will intensify further.
• U.S. real GDP growth forecast2.3% in 2026, 2.6% in 2027 (4Q/4Q)The growth mix is more investment-led, with nonresidential business fixed investment expected to grow 7% in 2026.
• U.S. consumption growth forecast1.8% in 2026Energy prices are squeezing disposable income, leaving real consumption growth soft over the next few quarters.
• U.S. core PCE inflation forecast3.0% in 2026 (4Q/4Q)Tariff pass-through is largely complete, and oil's pass-through to core inflation is expected to be limited, though airfare and other services prices could still rise.
• Fed policy viewRates unchanged in 2026, with two cuts expected in 2027The report thinks a total-demand shock would be needed before a rate hike becomes more likely.
• Euro area GDP forecast0.3% in 2026, 1.0% in 2027The 2026 downgrade is largely driven by volatility in Irish data; excluding Ireland, growth is about 0.9%.
• Euro area inflation forecastHeadline HICP around 3.0% in 2026 and 2.3% in 2027; core inflation at 2.4% and 2.5%, respectivelyEnergy prices keep headline inflation above target, and wage- and price-setting mechanisms may prolong inflation stickiness.
• ECB policy viewJune hike to 2.25%, with another 25 bp hike possible in September to 2.50%In 2027, as activity weakens and energy effects fade, rates may fall back to 2.0%.
• Japan policy rateThe BoJ has already raised rates to 1.00%In the base case, the next hike comes in April 2027; if Middle East tensions continue to ease, hikes could come in 4Q2026 and 2Q2027.
• China policy-rate wordingCurrent policy rate is 1.40%, expected to remain unchangedThe report emphasizes that policy remains in cruise-control mode, but the supply-side bias is strengthening, and fiscal deployment and strategic infrastructure spending may accelerate.

Impact & implications

For investors, the key macro pricing issue is not a single growth forecast, but how the oil and AI narratives reshape growth, inflation, and central-bank reaction functions. If oil prices ease and AI capital expenditure continues, global growth can remain resilient, with U.S. and Asian industrial chains benefiting the most; if the oil risk premium stays elevated for a long time, inflation is slower to come down, real income is squeezed, and growth risks become more pronounced for the Euro area and energy-importing economies. On the policy side, the Fed is leaning toward standing pat, the ECB still has room for a short-term insurance hike, BoJ normalization risks are moving forward, and emerging markets show a more differentiated mix of hikes, cuts, and unchanged rates.

Risks

• Energy-supply disruptions last longer than expected, causing the oil risk premium to become entrenched.
• Oil pass-through to core inflation, wages, and services prices is stronger than expected, hindering the return of global inflation to target.
• U.S. AI capital expenditure boosts productivity and demand less than expected, or labor-substitution shocks intensify.
• The market underestimates downside growth risks in the Euro area, and ECB rate hikes could further suppress demand.
• Rising underlying inflation in Japan leads the BoJ to hike earlier or more often.
• Weak domestic demand, property contraction, and insufficient employment-income transmission in China keep growth narrowly based.

What to watch

• The Strait of Hormuz situation, the speed of oil-flow recovery, and whether crude oil returns to around $90/bbl.
• U.S. core PCE, airfare prices, services inflation, and the speed at which tariff effects fade.
• Whether AI-related capital expenditure spreads from a few technology sectors into non-AI capital spending and the Asian industrial cycle.
• The wording and actual rate moves from the Fed, ECB, and BoJ in their 2H2026 meetings.
• Signs of second-round effects in Euro area wages, food, services prices, and energy costs.
• China's exports, fiscal infrastructure spending, property sales, consumption, and labor-income data.