Bi-Weekly Geopolitical Report – Blocs, Spheres, Empires, and Colonies (January 26, 2026)
by Patrick Fearon-Hernandez, CFA | PDF
We at Confluence have long tracked how voters in the United States are increasingly recoiling at the costs of global hegemony, i.e., the US’s traditional role as the big, dominant country that provides international security, order, and the reserve currency. We’ve shown that as voters became angry at the social and economic costs of hegemony, US leaders adopted more populist, nationalist, and isolationist policies in realms ranging from foreign relations and trade to immigration and fiscal policy. In recent years, we’ve noted how the US’s pullback from global leadership has encouraged increasingly powerful adversary countries such as China, Russia, and Iran to assert themselves, raising tensions and prompting the countries of the world to fracture into relatively separate geopolitical and economic blocs.
Our analysis indicated that this global fracturing would have multiple economic impacts, such as higher and more volatile price inflation, which called for specific investment adjustments. Nevertheless, we showed that the evolving US bloc was generally attractive for investors, since it consisted mostly of today’s rich, highly industrialized, technologically advanced liberal democracies and a few closely related emerging markets.