This is the second of a three-part article series

As 2026 approaches, corporate finance and treasury teams are navigating a landscape marked by structural shifts, policy turbulence, and growing macroeconomic headwinds. While Part 1 of this series examined the intensifying threat of payments fraud, Part 2 turns to four broader forces reshaping the global operating environment: record-high U.S. national debt, mounting concerns around an AI-driven market bubble, a slowing global and U.S. economy, and a projected surge in business insolvencies.

Each of these developments carries direct implications for liquidity management, capital allocation, forecasting accuracy, and enterprise-wide risk preparedness. Treasury leaders must therefore take a forward-looking position—anticipating shocks and adapting their strategies to an environment defined by rapid change and diminishing predictability.

This article offers a focused and integrated perspective on these forces—one that draws on credible research and reporting while distilling their implications specifically for treasury and finance leaders. The goal is not merely to summarize external findings, but to contextualize them within the realities of corporate treasury, helping decision-makers calibrate risk and navigate the complexity that 2026 is likely to bring.

Record-high U.S. national debt: Growing fiscal strains and treasury implications

The U.S. national debt surpassed US$38 trillion in October 2025—its highest level in history—according to PBS reporting based on data from the U.S. Treasury Department. PBS underscores the urgency of the situation, noting that the U.S. has recorded “the fastest accumulation of a trillion dollars in debt outside of the COVID-19 pandemic,” a troubling sign of federal finances under acute strain. Kent Smetters of the University of Pennsylvania’s Penn Wharton Budget Model told the Associated Press that rising government debt ultimately feeds higher inflation, “eroding Americans’ purchasing power” and making long-term financial stability harder to achieve.

Source: Peter G. Peterson Foundation.

The Government Accountability Office outlines the resulting pressures on households and businesses: higher borrowing costs, weaker investment capacity, lower wages, and more expensive goods and services. Michael A. Peterson, Chairman of the Peter G. Peterson Foundation, highlights the growing fiscal burden, stating in the PBS article, “We spent $4 trillion on interest over the last decade, but will spend $14 trillion in the next ten years.”

For corporate treasury teams, the implications are profound. Elevated federal debt increases the likelihood of interest rate volatility, sudden repricing of risk, and concerns over the long-run strength of the U.S. dollar. Global firms may face tighter credit conditions or disruptions in capital markets during periods of fiscal stress. While a full-blown debt crisis may not occur in 2026, the trajectory points to rising fiscal fragility—demanding more rigorous scenario planning, diversified funding sources, and disciplined liquidity management throughout the year.

AI boom or AI bubble? Rising risks as 2026 approaches

Artificial intelligence (AI) remains the dominant growth narrative in global markets, yet the speed and scale of AI-driven investment are prompting concerns that the sector may be entering bubble territory. In a widely discussed interview with Norges Bank Investment Management CEO Nicolai Tangen, renowned economist and author of What Went Wrong with Capitalism Ruchir Sharma warned that AI now displays all four classic bubble signs—“overinvestment, overvaluation, over-ownership, and over-leverage,” as reported by Business Insider.

Sharma notes that Big Tech’s pivot from cash to debt to finance AI build-outs has amplified late-cycle risks, pointing to Meta, Amazon, and Microsoft as among the “biggest issuers of debt” in the market. He estimates that roughly 60% of U.S. GDP growth in 2025 was driven by AI-related activity, suggesting that broader economic fundamentals are considerably weaker than headline figures imply.

The risk trigger, Sharma argues, is clear: any upward pressure on interest rates makes borrowing costlier and reduces valuations for high-growth companies. “At the slightest sign that interest rates are going to go up, I think that's your sign that, 'Okay — this is done now,” he said. If inflation rises again and the U.S. Federal Reserve (the Fed) raises rates next year, he cautions that it could spark a major downturn in 2026.

The Organization for Economic Co-operation and Development (OECD), in its December 2025 outlook report by AXIOS, echoes these concerns, noting that a correction in AI-inflated equity markets is now “a key downside risk” to the U.S. economy. The OECD further underscores that weaker-than-expected AI returns or higher-than-anticipated inflation could “trigger widespread risk repricing,” particularly among highly leveraged non-bank financial intermediaries.

Oxford Economics offers a more nuanced perspective. In its analysis, the firm suggests tech investment as a share of GDP could reach new highs, potentially lifting U.S. GDP growth to 3% in 2026 in an upside scenario. However, risks are equally present on the downside: a scenario modelled on the dot-com bust shows U.S. growth falling below 1% if AI investment slows sharply and stock prices decline.

For treasury teams, preparing for both outcomes is essential. Equity-market swings may influence capital raising plans, while increased leverage among technology giants could affect credit conditions more broadly. Treasury forecasting must therefore incorporate both optimistic and adverse AI trajectories to remain resilient in 2026.

A slowing global and U.S. economy: Growth tempered by geopolitical risk, inflation, trade disputes, and tariff uncertainty

The global and U.S. economies are expected to lose further momentum in 2026 as unresolved geopolitical conflicts, persistent inflation, ongoing trade disputes, and uncertainty surrounding the future path of tariffs weigh on demand. The OECD now forecasts global GDP growth to slow to 2.9% in 2026, down from 3.2% this year—reflecting tariff-driven price increases that are filtering through to weaker household spending and softer capital investment.

U.S. growth is also set to moderate. OECD projections indicate the U.S. economy will expand by just 1.7% in 2026, down from 2% in 2025, as employment growth weakens and inflation is expected to edge up to 3% from 2.7%. Allianz Trade’s latest Economic Outlook report  offers a similarly subdued view, forecasting global GDP slowing to 2.5% in 2026 and describing the environment as “stagflation light”—modest growth paired with prices that remain too high.

Trade disputes add further complexity. Allianz Trade expects U.S. tariffs—already at 11.2% in August 2025—to reach 14% by year-end. Export-driven countries such as Vietnam, Mexico, and Canada could see GDP growth reduced by 0.4–1.3 percentage points due to these tariff increases. The Economist Intelligence Unit’s (EIU) Global Outlook 2026 report further reinforces these concerns, projecting global growth to slow to 2.4% next year as trade dislocation, rising borrowing costs, inflation stickiness, and softer global demand fully materialize.

For corporate treasurers, this environment signals pressure on margins, increased cash flow volatility, and a greater likelihood of delayed receivables—especially across supply chains exposed to tariff-sensitive sectors. Preparing for a slower, more fragmented global economy will require vigilant working capital oversight and close monitoring of counterparty financial health.

Global business insolvencies to surge in 2026

Corporate treasurers will contend with a more fragile operating environment in 2026 as business failures rise across major markets. Allianz Trade’s latest Global Insolvency Outlook report forecasts a 5% increase in global insolvencies in 2026, following a 6% jump in 2025—marking the fifth consecutive year of increases and pushing bankruptcies to levels 24% above pre-pandemic norms.

The surge is broad-based. Asia and Western Europe are already seeing pronounced spikes, with 2025 data showing insolvencies up 33% in Hong Kong and Singapore, and 38% in Italy and 26% in Switzerland. Larger firms are under strain as well: Allianz Trade reports 327 major insolvencies in the first nine months of 2025—“roughly one every 20 hours.”

Export-oriented economies remain particularly exposed. As the cushioning effects of early tariff front-loading fades, Allianz Trade expects insolvencies in the U.S. and China to rise by 8% and 10% respectively in 2026. Across sectors—automotive, construction, retail, and services—the squeeze from weaker demand and thinner margins is intensifying, with an estimated 2.1 million jobs at risk globally.

For corporate treasurers, the implications are clear: rising counterparty risk, tighter liquidity conditions, longer payment terms, and greater vulnerability to cross-border failures. Strengthened credit risk assessment, robust credit insurance protection, and closer monitoring of supplier financial strength will be essential to navigate the year ahead.

Conclusion

2026 will not be defined by a single economic headwind but by the convergence of several powerful ones: historic levels of U.S. federal debt, growing concerns around an AI-driven investment bubble, a slowing global economy, and rising business insolvencies. For corporate finance and treasury leaders, the year ahead will necessitate deeper scenario analysis, enhanced liquidity buffers, stronger risk management frameworks, and closer monitoring of macroeconomic inflection points.

By preparing now—and by understanding how these four forces intersect—treasury teams can position themselves to navigate uncertainty with greater confidence, resilience, and strategic clarity.

To read the first part of this article series, click here: