ÃÛ¶¹ÊÓƵ

As global economies recalibrate to a new set of structural realities, the 31^st ÃÛ¶¹ÊÓƵ Reserve Management Seminar brought together over 70 institutions from 40+ countries to unpack the implications for sovereign investors. Held over the course of a week at Wolfsberg, the seminar marked a notable shift in tone and focus – from cyclical concerns to systematic risks, and from tactical positioning to strategic resilience.

For the first time in the seminar’s three-decade history, geopolitics has overtaken economics as the dominant concern among central banks. This is not a marginal shift. It’s a reordering of priorities that reflects a world entering an extended period of fragmentation, conflict risk, and political volatility. Survey results show an overwhelming expectation of stagflation in the US, replacing last year’s cautious optimism around a soft landing. The rules of reserve management, as many participants noted, are being rewritten.

Gold remains central to this evolving playbook. Over 90% of surveyed institutions said they expect gold to outperform over the next year, yet views were split on whether it remains a buy at current levels. The dilemma is emblematic of broader uncertainty: gold is embraced as a hedge, but less so as a return driver.

Meanwhile, sentiment around the US dollar has begun to wobble. While still expected to hold its role as the global reserve currency, the outlook on future demand is more nuanced. Ony 6% of respondents expect demand for US assets to remain strong; most foresee stagnation or decline. Still, no serious challenger has emerged. The euro may benefit tactically, and central banks maintain interest in the renminbi, but structural barriers remain.

European sentiment remains surprisingly resilient. Participants acknowledged that much of the renewed optimism around Europe stems from relative pessimism toward the US. Nonetheless, EU-wide support for integration, defense cooperation, and the euro itself has reached multi-decade highs. Fiscal expansion in Germany is expected to support broader eurozone growth, but the challenge remains: Europe’s fragmented bond market and lagging service sector continue to weigh on its investment appeal. Will Europe deliver the long-waited structural reforms and compete with the USD as an alternative safe-haven?

Perhaps the most delicate topic was the political pressure being placed on central banks – especially the Fed. With a US administration pursuing sweeping policy changes ahead of the 2026 midterms, many participants expressed concern that monetary policy risks becoming politicized. Nearly two-thirds of survey respondents said Fed independence is at risk. Panelists pointed out that any erosion of institutional credibility could carry lasting consequences for inflation expectations and investor confidence.

Central banks are worried about unsustainable debt levels and more then 60% indicated are worried about declining demand for government bonds. Rising debt could lead to higher long-term interest rates with a significant steepening of the yields according to more than 80% of surveyed central banks. Fears of financial repression - policies designed to redirect capital to fund government priorities – are rising. Trade protectionism could lead to financial deglobalization with a negative impact on cross-border capital flows.

One of the most forward-looking sessions centered on demographics and the macro implications of aging populations. The consensus: declining working-age populations globally will likely sustain structurally higher inflation. In turn, central banks will be under long-term pressure to keep rates elevated, regardless of near-term easing cycles. That backdrop calls into question the sustainability of high public debt levels – particularly in the US, where fiscal policy is expansionary and the debt-to-GDP trajectory is steepening.

Artificial intelligence was also in focus – not as a buzzword, but as a productivity lever with tangible implications for inflation, wages, and growth. In an exclusive fire chat,  Nobel Prize-winner Michael Spence said that AI could boost  productivity by 1% per year; but he  noted the need for governments to democratize AI adoption across sectors, rather than allowing gains to concentrate in already advanced industries. Open-source AI, falling costs, and wide-ranging applications make this a potential tailwind for sovereign portfolios – but only if the right infrastructure is in place.

The ÃÛ¶¹ÊÓƵ Reserve Management Seminar 2025 was not just a platform for thought leadership; it was a forum for navigating a regime shift in real time. In the coming months, ÃÛ¶¹ÊÓƵ will continue the dialogue with follow-up interviews, articles, and client conversations designed to deepen the understanding of these themes.

For sovereign investors, the message is clear: this is no longer an environment whether old frameworks hold. Strategic flexibility, geopolitical awareness, and a clear-eyed view of long-term risk are essential in shaping reserve management for the decade ahead.