Outlook for 2023: Keep It Simple

KKR

Henry McVey

Research

74 Pages

KKR lays out a pragmatic 2023 playbook: favor simpler, collateral-backed cash flows and be selective across risk assets. They see inflation past peak but still elevated, policy tightening cresting, and fiscal support steadier than expected. The stance is constructive—especially in credit—while urging caution around crowded mega-cap tech and fragile capital structures.

Source: KKR

Key Takeaways

Tightening cresting: Only 12% of top 25 central banks hiking in 2023 versus 84% in 2022.
Credit-led opportunity: High-yield near 85 cents and higher short rates favor lenders and collateral-based cash flows.
Selective in equities: With issuance near 2009 lows, tilt from mega-cap tech toward cheaper small caps and cyclicals.
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