Masters in Business• Jul 7, 2025• 1:11:45Interview

Citi Wealth Chief Investment Officer Kate Moore on Macro Investing | Masters in Business

From Masters in Business

Kate Moore•Chief Investment Officer, Citi Wealth

Executive Summary

Kate Moore, CIO of Citi Wealth, is deeply concerned about a U.S.
economic slowdown in the second half of 2025, forecasting sub-2% growth due to policy uncertainty and the persistent pain from sectoral tariffs.
She advocates for an investment philosophy that rejects simplistic mean-reversion metrics (like Shiller CAPE), arguing that the market's composition and fundamentals have structurally changed, justifying higher valuations for quality businesses.
Moore identifies wealth management as a key long-term growth sector, driven by wealth creation, intergenerational transfers, and the increasing democratization of more liquid alternative investments.
She believes AI tools are transforming investment analysis, enabling faster, more informed decisions, and emphasizes the importance of an interdisciplinary, liberal arts-style education to effectively leverage these technologies.

12 quotes

Concerns Raised

A significant U.S. economic slowdown is expected in H2 2025 and early 2026.
The long-term negative impact of sectoral tariffs on corporate capital expenditure and supply chains is underestimated.
Private markets are becoming overcrowded, which will likely lead to lower future returns and difficulty in finding quality deals.
Relying on outdated mean-reversion valuation models will lead to poor investment decisions.

Opportunities Identified

The wealth management sector offers consistent, long-term structural growth.
Non-discretionary corporate spending, such as on security software, provides a durable investment theme.
The expansion of liquid alternative investment vehicles will democratize portfolio diversification.
Leveraging AI tools can create a significant information and speed advantage for investors.

Key Themes

A Looming Economic Slowdown

Moore expresses high conviction that the U.S. economy will slow significantly in H2 2025 and early 2026, with growth falling to sub-2% or even sub-1.5%. This is driven by policy uncertainty from tariffs, which she believes will cause companies to deprioritize expansionary capital expenditures.

This provides a specific, time-bound macroeconomic forecast from a major CIO, suggesting investors should begin positioning portfolios for a less favorable growth environment.

Modernizing Investment Valuation

Moore forcefully argues against relying on historical valuation metrics like the Shiller CAPE ratio for mean reversion. She contends that the modern market, dominated by capital-light, high-cash-flow businesses, is structurally different from past eras, making historical comparisons lazy and misleading.

This challenges a cornerstone of value investing and suggests that quality, growth-oriented companies can sustain higher valuations for extended periods, requiring a more nuanced approach to asset selection.

The Evolution of Wealth Management

Moore identifies the wealth management sector as a consistent growth area, citing the vast wealth created post-GFC and the coming intergenerational transfer. She predicts the space will be transformed by the increasing availability of liquid alternative investment vehicles, which will democratize access to diversification beyond traditional stocks and bonds.

This highlights a major strategic shift in asset management, where providing access to a broader, more sophisticated range of products, particularly in alternatives, will be key to capturing growth.

The Geopolitical Drag of Tariffs

While not believing in full "de-globalization," Moore sees ongoing separation between the U.S. and China. She argues the market is past "peak tariff shock" but "nowhere close to peak tariff pain," with persistent sectoral tariffs having a more damaging long-term impact on corporate behavior and supply chains than broad-based ones.

This insight advises investors to look beyond headline tariff announcements and analyze the deeper, industry-specific impacts on capex, sourcing, and long-term profitability.

AI as an Investor's Co-Pilot

Moore views AI tools as a significant productivity enhancer, making her a "100 times more informed" and faster investor by providing real-time data and context. She counters concerns about AI replacing junior talent by stressing the need for a broad, interdisciplinary education to learn how to ask the right questions and use the tools effectively.

This theme underscores the immediate impact of AI on the investment process, shifting the required skills from deep, siloed knowledge to the ability to synthesize information from multiple domains using advanced technology.

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