KKR expects the Federal Reserve to raise interest rates again at its December and March meetings. The Federal Reserve appears to be the most optimistic about the economy since it first start publishing forecasts in 2011, and investors should align themselves accordingly, say strategists at a private-equity giant. KKR expects the Federal Reserve to raise interest rates in December and then March of next year before holding at 4.375% through 2029, a stance that puts them on the hawkish side of Wall Street forecasts.
Henry McVey, chief investment officer of KKR’s balance sheet, wrote in a note this week that he believes the tightening cycle is increasingly based on rising GDP and heightened core inflation, which omits food and energy prices. McVey added that the core personal consumption expenditures price index continues to run closer to 2.5%, and the Fed expects it to remain above target for eight years in a row, further supporting at least two more hikes — despite FOMC members’ expectation for just one. Don’t Short Yourself offers weekly money tips to help you earn it, stack it and grow it.
I agree to the Terms of Use, Privacy Notice and Cookie Notice. I would like to receive updates and special offers from Dow Jones and affiliates. I can unsubscribe at any time.
KKR has reacted to the central bank’s latest meeting by raising its forecasts for the 10-year Treasury , with its yield expected to reach 5.1% by the end of 2026, up from a prior estimate of 5%, and 4.9% by December 2027, an increase from the previous forecast of 4.7%. KKR recommends infrastructure, asset-based finance, opportunistic credit and operational improvement-driven buyouts. KKR also lists a number of core themes it sees standing to gain from capital becoming more expensive and as focus increases among companies on productivity.
Those areas include productivity and the retraining of employees, energy and grid infrastructure and capital-heavy to capital-light transitions. Copyright ©2026 MarketWatch, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8 I’m in my 50s.
My mother died from Alzheimer’s. Do I need long-term insurance? The 2026 Mercedes-Benz GLE Coupe offers equal measures of luxury and sensibility Wall Street is betting Trump backs down on Iran — but what if the ‘TACO’ trade fails this time?
Extract — continue reading at the source.
