year-end 2016. This upward trajectory in the worlds largest manufacturing economy is a big deal, as it underscores our belief that reflation is occurring not only in the.S. The other question we often get is why did Private Equity not maintain its historic 400-500 basis point spread above Public Equities this cycle, and as such, are we comfortable forecasting that spread will return during the next five-year cycle? Members can be selected to try new products for free, share samples, and more! GDP forecast.25, which is a 25 basis point upgrade from.0 previously, and slightly above the current consensus.2. Section I: Global Macro Basics In the following section we update several key top-down metrics, including targets for GDP growth, rates, earnings, oil, and expected returns. Source: Bureau of Economic Analysis, Bureau of Labor Statistics, KKR Global Macro Asset Allocation analysis. As we have indicated in our outlook, we do not see the dollars move getting extreme in our base case, but there are multiple scenarios where it could move beyond its fair value in 2017. Indeed, we would be remiss in this outlook if we did not also spend time on areas where our original investment thesis may need to be revisited at some point in 2017 or at least tweaked to better accommodate the new world reality that. Buy credit protection at current levels as a low-carry way to gain exposure to a potential default cycle in the.S., driven by excess lending.S. It is also subject to downside risk if the new administration does not advance its tax reduction agenda by mid-2017 or trade tensions flare up at any point during the year.
Outlook for 2017: Paradigm Shift KKR
In Addition to the.S., We Believe Investors Will Seek Out Large EM Consumption Stories in the Coming Years Data as at December 31, 2015. 10-Year Yield Target by 50 Basis Points. However, the limited fiscal stimulus we expect will not be enough to counteract populism, which we think remains a major investment theme in the coming years. The Illiquidity Premium Has Remained Fairly Constant Across a Variety of Environments Data as at September 30, 2016. We also believe that current real 10-year rates of around 50-70 basis points are at the top end of their near-term range, and they could actually decline in the first half of 2017. Source: McKinsey, Elderly In the Developed World: Investment Themes for Aging Societies. First, our recent expedia sconto newsletter trip to China in December confirmed that the countrys PPI has bottomed after 54 months of deflation. Our Earnings Outlook Is Contingent on a Likely Change in Policies Data as at December 8, 2016.