Must Read Research

It’s amazing how much clearer the road ahead looks once you stop staring at the rearview mirror. With most of our macro year-ahead reports out, we showcase ten themes to watch: from growth resilience to the absence of an AI bubble. We also spotlight the rise of private companies, a regulatory turn benefiting internal combustion engine auto manufacturers, and a quick guide to handling the inevitable questions about the economy this holiday season.

Our macro year-ahead notes are out, and we selected ten of the key views for a compendium.

Two of the themes reflect our above-consensus growth forecasts for the U.S. and China economies, supported by another core call: there’s still no AI bubble. Derivatives Strategy introduced a new Bubble Risk Indicator, which flags bubble-like instability in areas including U.S. nuclear and the Korean Kospi. Bullishness on emerging markets also makes the list, helped by expectations for a weaker U.S. dollar and investor underexposure to the asset. Our official forecast is for flattish 10-year Treasury yields, though Chief Investment Strategist Michael Hartnett and Rates Strategy both see rate risk skewed to the downside. U.S. Equity Strategy expects muted S&P 500 returns, with a 7100 year-end target, but does see room for capex strength and a broadening of performance. Finally, Private Credit returns are expected to soften in 2026, tempering willingness to allocate.

With private companies playing an increasingly critical role in the global economy, BofA Global Research has expanded its coverage of this booming segment.

We’ve launched thematic reports like Head of Thematic Investing Haim Israel’s Private Companies Primer, which profiles 16 standout firms, and introduced a new research format, Private Profiles, offering explorations of individual companies. Senior U.S. Aerospace & Defense Analyst Ron Epstein wrote 18 notes this past week on aerospace and defense privates involved in everything from AI flight operations to autonomous ships. Haim highlights the broader shift behind the trend: since 2000, the number of U.S.-listed companies has halved to just over 4,000, while private VC-backed companies have risen 25-fold.

Global regulatory resets are increasingly favoring internal combustion engine vehicles as we approach 2026.

Europe may postpone the 2035 ban on internal combustion engine vehicles, the U.S. is rolling back EV mandates by eliminating CAFE (Corporate Average Fuel Economy) penalties and EPA tailpipe rules, while China is phasing out EV subsidies. Horst Schneider argues that this easing could trigger a re-rating of undervalued European OEMs (original equipment manufacturers). Still, Horst stresses that softer CO₂ regulations don’t erase the sector’s structural headwinds. EU automakers continue to face weak model cycles, sluggish volume and pricing growth, and intensifying competition from Chinese OEMs, whose European market share has doubled from 2.5% in 2024 to 5% in 2025.

Holiday gatherings often seem to turn into impromptu economics panels, so Senior U.S. Economist Aditya Bhave and the BofA Global Economics team prepared a cheat sheet for the 10 questions you’re most likely to get asked this season.

Each comes with a quick answer (for when you’re trying to escape) and a longer one (if you are enjoying the debate). A few highlights. “So… what’s going on with inflation?” You can confidently say it’s running near 3%, with tariffs adding about 0.5pp. The positive: prices haven’t surged the way many feared after April’s “Liberation Day” announcement. “Why does housing feel impossible?” Mortgage rates hover around 6.4%, home prices are ~16% above pre-pandemic trend, and the median age of first-time buyers has climbed to a record 40 (vs. 33 in 2020). Will rate cuts help?” Maybe — but 30-year mortgage rates depend on the 10-year Treasury yield and the mortgage spread. If the Fed cuts too fast, the 10-year Treasury yield might even increase.