JP Morgan Private Bank has outlined the effects of artificial intelligence (AI), global fragmentation and inflation on investment strategies in its 2026 Global Investment Outlook, titled Promise and Pressure.
This outlook examines how these factors are shaping the investment environment and influencing decision-making for investors over the next two years.
The report identifies AI as a major driver of industry transformation, cost reduction and productivity growth.
It observes that AI is also altering labour markets and generating new investment activity, with some market participants raising concerns about possible overvaluation.
However, the bank’s analysis suggests that current developments in AI are based on underlying economic and technological trends, rather than excessive speculation.
JP Morgan Private Bank global investment strategy co-head Grace Peters said: “In 2025, uncertainty defined the market narrative.
“Today, three major themes set the agenda, reflecting a fundamental shift in how economies operate and requiring a refreshed investment playbook, one that blends discipline with flexibility.”
The report also emphasises the increasing fragmentation of the global economy and addresses changes in inflation dynamics since 2022.
Regions such as North America, Europe, Asia and Latin America are adjusting their approaches in response to shifting trade, security and currency dynamics, according to the news release.
The emergence of new economic blocs and the reorganisation of global supply chains are prompting investors to strengthen and diversify their portfolios.
JP Morgan Private Bank global investment strategy co-head Stephen Parker said: “Looking to 2026, investors face the dual forces of AI-driven productivity and persistent inflation within a fragmented global landscape.
“Our goal is to help clients find new opportunities and build resilient portfolios aligned with their long-term goals.”
JP Morgan Private Bank notes that higher inflation rates and rising government deficits have introduced greater volatility to the investment landscape.
Constant supply chain pressures and fiscal policies are contributing to this environment, compelling investors to build portfolios that can withstand fluctuations in price levels.
The outlook suggests that structural factors, including capacity constraints and consumer spending patterns, are likely to sustain inflationary pressures over the medium term.
JP Morgan Private Bank global investment strategy co-head Stephen Parker said: “Bonds are still essential to portfolio construction, but investors need to look beyond traditional fixed income to address persistent inflation and increased rate volatility.
“To navigate this new regime, complementing core bonds with commodities, real assets and uncorrelated hedge funds provides diversification for equity exposure amid persistent inflation.”
Last year, JPMorgan Private Bank added a new group of committed advisers to Edinburgh, increasing its presence in Scotland.
