Fiscal Strains, Chinese Deflation, and U.S. Medical Inflation Signal Structural Risks

Northern Trust’s Global Economic Research team reviews fiscal, macroeconomic, and healthcare challenges shaping investor risk assessments.

• France & U.K. fiscal strains: Rising deficits and political gridlock are driving bond yields higher; Fitch downgraded France to A+, while U.K. debt costs already exceed education spending.

• China’s overcapacity & deflation: Supply gluts in green tech and consumer goods fuel price weakness, with “involution” curbing profitability despite state-led consolidation efforts.

• U.S. healthcare inflation: Employer costs are projected to rise 6.5–9.5% in 2026, driven by chronic disease, labor costs, and new treatments.

How might these structural pressures reshape global capital flows? Explore the full report for deeper insights.