Macro State of Play

KKR

Henry McVey

Research

11 Pages

KKR’s Global Macro team, led by Henry McVey, outlines how a new “Regime Change” in markets is reshaping asset allocation and global investment opportunities. The report emphasizes a pivot toward productivity-driven growth, faster Fed easing, and renewed focus on Asia, where investors remain significantly underweight relative to fundamentals.

Key Takeaways

Policy transition: The Fed is expected to cut rates multiple times in 2025 and 2026 as labor risks rise despite sticky inflation.
Productivity tailwind: Stronger productivity is extending the business cycle and offsetting higher deficits, supporting equity valuations.
Asia opportunity: Global investors remain up to 600 basis points underweight Asia, where structural growth and trade integration continue to accelerate.
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