The writer is chief market strategist for Europe, Middle East and Africa at JPMorgan Asset Management

After another strong year and with stocks sitting on fairly lofty valuations, some investors are starting to worry about what 2026 might have in store. While Wall Street strategists may be expecting double-digit gains for US stocks in 2026, more bearish forecasters flag concerns about various risks from the bursting of an AI bubble to problems in private credit to a new round of geopolitical tensions.

But the main thing investors have to worry about in 2026 is inflation. To understand why, we need to reflect on 2025. This year has already brought all manner of bad headlines, from tariff wars to conflicts. And yet here we are, with most major equity indices close to all-time highs and corporate bond yields at near-record tight spreads over government debt, indicating confidence in the outlook for companies.