North American institutional investors and private market managers expect continued U.S. economic growth in 2026, but markets entering a more fragile and selective phase, according to new independent study commissioned by Ocorian, asset services provider
The study, conducted among 248 institutional investors, private market managers, and hedge funds based in the United States and Canada, responsible for $17.77 trillion in assets under management, shows that confidence in the underlying economic momentum remains intact, even as respondents actively prepare for valuation adjustments, persistent inflation, and shifting political conditions.
Almost all respondents (98%) expect a correction in U.S. stock markets during 2026, reflecting a widespread acknowledgment that valuations remain elevated, rather than a belief that a recession is inevitable. Investors report that they are adjusting their strategy, exit planning, and deployment pace accordingly, with increased emphasis on operational value creation and downside resilience.
Inflation remains the main macroeconomic concern. All respondents expressed some degree of concern, and 44% described themselves as very concerned. While nearly half (48%) foresee inflation increasing in 2026 and an additional 15% believe it will remain stable, expectations for a rapid return to the Federal Reserve’s 2% target are limited. Only 18% anticipate that this target will be reached in 2026, with most postponing their expectations to 2027 or later.
Despite these pressures, investors remain relatively optimistic about growth. Around half of respondents (49%) align with the White House’s expectations of U.S. GDP growth between 3% and 4% in early 2026, placing them well above prevailing consensus forecasts. This combination of growth confidence and increased caution points to what the study describes as a period of “moderate optimism.”
The risk of recession is considered high, but not inevitable. Nearly six in ten respondents (57%) believe there is a 40% or greater probability of a U.S. recession in 2026, well above long-term benchmark expectations. However, the results suggest that investors are treating recession as a real scenario that must be planned for, rather than a base case outcome, and continue to allocate capital selectively where opportunities are risk-adjusted.
