The Divergence Conundrum

KKR

Henry McVey

Research

89 Pages

KKR examines a global economy splitting between capital rich growth engines and capital starved sectors. The paper argues productivity, AI infrastructure, national security, and sticky inflation are reshaping asset allocation, with investors pushed toward quality, nominal GDP linked assets, and more exposure to Asia.

Key Takeaways

Divergence Is Widening: Tech capex contributed 1.6 percentage points to first quarter GDP growth, while non tech capex and trade both contracted meaningfully.
Inflation Stays Sticky: KKR forecasts U.S. CPI at 3.6% in 2026, above 3.3% consensus, as geopolitics and supply chains keep pressure elevated.
Productivity Supports Growth: U.S. labor productivity rose 2.4% over the last 8 quarters, helping KKR stay above consensus on 2026 U.S. GDP.
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