The Art of Learning

KKR

Henry McVey

Research

26 Pages

KKR shares how recent events surrounding trade, geopolitics, and monetary policy have amplified their Regime Change thesis. They explain how these cross-currents affect growth, inflation, and valuations. They conclude: Traditional government bonds no longer serve as reliable shock absorbers for investor portfolios.

Key Takeaways

Traditional portfolio strategies are under pressure: The changing correlation between stocks and bonds, along with a weaker U.S. dollar, is disrupting conventional asset allocation models.
Diversification into international assets is crucial: Investors are encouraged to explore international bonds and private market alternatives to mitigate risks associated with domestic market volatility.
Tariff reductions may boost global growth: Recent partial tariff relief has led KKR to revise GDP forecasts upward for the U.S., Europe, and China, indicating potential positive impacts on global economic growth.
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