Lates News

Henry McVey, global macro and asset allocation head of alternative asset management firm KKR, stated in a research report that the widening fiscal deficit and stubborn inflation imply that bonds may not always rise when stocks are sold off, breaking the traditional relationship between the two assets. On safe-haven trading days, government bonds no longer serve as a "cushion" in traditional investment portfolios. According to KKR's data, diversified allocations will pose challenges for stock investors as the US stock market is twice the size of the European, Japanese, and Indian markets combined. However, bond market investors have greater opportunities to invest in non-US assets as the correlation between US treasury bonds and other global fixed income assets is decreasing. KKR also believes that with President Trump seeking to reshape the global trade landscape, there is a risk of structural weakness in the US dollar.