“We are going to see consumer pain, and particularly on the lower-income side of things,” says David Saitowitz, head of US liquid credit at ICG, a global alternative asset manager with $127 billion in AUM, on the latest Credit Exchange podcast with Lisa Lee.

That means certain sectors could get hurt while others do very well, he says, adding that it’s a trend he’s already seeing. Anything consumer related – whether it’s housing, travel, to apparel and retail, are under pressure.

“Those areas, I think, are all feeling a decent amount of pain, and I think they will continue [to].”

Saitowitz is especially worried about housing, as rates stay higher for longer. The economics around housing continue to be weak and that has real implications for people everywhere, he observes.

He also notes that we are in an interesting time where, with a massive technological innovation underway, that factor could be overshadowing geopolitical events which may have been considered in a more serious way previously.

On artificial intelligence, ongoing new advancements will lead to difficulties for software firms, he believes, especially those that were over-levered and need to refinance soon. “We will see some LMEs; we will see some bankruptcies,” he says.

And when that does happen, he adds, recent history suggests recoveries will probably be worse than we have seen in some time.

But that said, there’s plenty of companies that will do just fine, and Saitowitz doesn’t believe there will a widespread or massive spike in defaults.