TOL - 20th Feb, 2026
Lazard's Ron Temple's three core convictions and where investors should be looking now
The chief market strategist is bullish on EM but worried about geopolitical risk in 2026.
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This interview was filmed on Monday 9 February 2026.
When I last interviewed Ronald Temple back in August last year, he was calling it the beginning of the end of US exceptionalism.
As chief market strategist for Lazard Asset Management, Temple is tasked with keeping his finger firmly on the market pulse, and distilling the data into actionable investment ideas.
In this interview, he explains why he hasn't changed his mind on the end of US exceptionalism and where that's creating opportunities for investors in 2026.
Expanding on the end of US exceptionalism, Temple says it is earnings growth that is driving his outlook on global equities markets.
"The most important reason I think non-US markets can outperform the US is when I look at earnings growth in non-US markets, especially emerging markets, I see strong earnings growth, but it's diversified across sectors. It's diversified across countries."
"When I look at the US, it is almost all tech. When I look outside the US, I've got more diversified growth drivers, a much lower valuation, and less unpredictability in terms of policy that could basically detract from returns - because of the dollar, because of yield curve, because of other question marks."
Three core convictions
At the heart of his thesis are three key developments that he thinks are driving this change.
"Number one is the US dollar is likely to continue weakening over the next several years," says Temple. "Number two is developed market yield curves will steepen, and that's across Europe, US and Japan."
"And number three is that we will look back at 2025 on two aspects and say, one, it was the beginning of the end of American exceptionalism that will be sustained for several years, and two, it's the year when US treasuries were no longer viewed as the risk safe haven, but instead a credit instrument."
While he has a positive, but nuanced view of the US economy (more on that below), Temple is "most bullish" on EM.
"When I look at the equity market, I think we've still got a lot more runway on the upside for emerging market equities, both near-term and strategically."
But he's keen to stress that it's important for investors not to treat emerging markets as a monolith or expect outperformance across the board.
"EM is one of the most obvious places where you want to be active, not passive," says Temple. "There's a broad opportunity set there and with the right active manager, I think you can really capitalise on it."
"If you were passively invested in an EM last year, you did well. The EM index was up quite a bit more than the US index, but you would have had a lot of capital in India, which basically didn't do much at all last year."
"If you had an active manager who got you even a small amount of exposure to those other smaller markets, you could have significantly outperformed the index."
Elsewhere, Temple is seeing potential in both Japan and Europe. A recent landslide victory for the LDP has paved the way for genuine economic change.
"Prime Minister Takaichi is going to be able to get reforms and policy changes through that will be positive for returns on capital for companies in Japan and will basically be more positive or growth-stimulative for Japan."
Over in Europe, continued spending is driving growth, as is the potential unwinding of excessive regulation.
"In Europe, there's a long-term optionality around infrastructure investments, spending on defence, and hopefully reforms of the bureaucracy."
"There is a window of opportunity for Europe to basically engage reform and to accelerate growth."
On the other side of the equation, he remains concerned around how the geopolitical situations in the US, Russia-Ukraine and, most importantly, Iran unfold this year.
"The biggest near-term risk I'm worried about is the risk of US attack on Iran," says Temple. "We think there's a high probability the US will attack."
One significant upshot of any US attack could be Iran's decision to mine the Strait of Hormuz, which accounts for 20% of the world's oil and natural gas flows.
Even after hostilities died down, it would take a further two months to de-mine the strait again, says Temple.
"That would be the game changer that could affect markets. Markets don't care about humanitarian crises. Markets don't care about military action on a small scale. Markets care about things that change prices and that would move prices."
On the US and Federal Reserve
Temple agrees with broad expectations that he will push to lower rates while also looking to reduce the Fed's balance sheet.
When I last spoke to Temple, the issue of Fed independence was also front of mind, and remains an ongoing concern.
"What's still not clear though is how independent his decision making will be from the influence of the White House," says Temple.
"Regardless of who the president might have nominated, that person will have to prove that the Fed is still independent. That will take time. This concern will linger in the markets probably through the rest of this year and into 2027."
Ultimately, Temple says the "proof will be in the pudding" on where US monetary policy goes this year - and whether the Fed can maintain its independence.
"Let's see how the inflation data progresses in the next year, how the employment data progresses and see what policy actions the FOMC takes, and then markets will have to decide - 'is this a central bank operating truly independently of politics'?"
On the broader US economy, the picture remains complex, with inflation risk remaining ever-present, even as the economy looks robust.
"The economy still seems to be running pretty hot," says Temple. "If we looked at consensus expectations in 2025, at one point the consensus for growth was that we would only grow 1.4% in the United States. It now looks like the US economy will have grown 2%, if not above 2%."
But data from Zillow suggests shelter inflation, which makes up 45% of CPI weighting in the US, has shifted downward to 2.2%.
"At the same time, we have more tariff inflation, and we might also have an economy that's running a little hot, especially if the Fed cuts rates even further. So I think the inflation story's not over, but I'm not worried that we're about to enter a five-year period of elevated inflation."
For Temple, the bigger worries are how the US's K-shaped economy and are AI capex are potentially obfuscating the country's true economic strength.
"The top 20% of the US population accounts for probably 50% of discretionary spending," says Temple. "As long as you've got that core engine of the population doing well, your GDP numbers could look good, but there might be more fragility beneath the surface."
In the corporate sector, the big-spending tech giants are helping drive economic growth, but leaving the economy unbalanced in the process.
"It looks like AI capex in 2026 may well be $650-700 billion," he says. "That could be a meaningful contribution to GDP growth - about another 100 basis points of GDP if that's all spent this year."
"That looks good at a GDP level, but it's a pretty narrow part of the economy that benefits from it. So I just really worry more generally about that unevenness of the economy and the narrowness of the growth."
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Tom is a Senior Investment Writer and Presenter at Livewire Markets, having worked as a writer and editor for 10 years, specialising in investing and personal finance.
He has previously worked at Finder, FourFourTwo and Man Of Many covering everything from film to football.
He has a Masters in Media Production and a Bachelor's in Journalism.
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Tom is a Senior Investment Writer and Presenter at Livewire Markets, having worked as a writer and editor for 10 years, specialising in investing and personal finance. He has previously worked at Finder, FourFourTwo and Man Of Many covering...
Expertise
Tom is a Senior Investment Writer and Presenter at Livewire Markets, having worked as a writer and editor for 10 years, specialising in investing and personal finance. He has previously worked at Finder, FourFourTwo and Man Of Many covering...
Expertise
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