(Bloomberg) -- Apollo Global Management Inc. Chief Executive Officer Marc Rowan sees the US having a “non-recession recession,” as financial markets feel some pain while the underlying economy remains strong. 

Fixed income and equities markets have already adjusted, Rowan said Tuesday at an event hosted by the Economic Club of New York. Other areas, including real assets, have yet to fully price in the effects of rising interest rates.

“We have a ways to go in terms of the correction,” Rowan said. “We have a ways to go in terms of growth. Very few things other than public marks have adjusted.” 

Investors are adjusting from a “decade of abnormality” with low rates, Rowan said. “Nothing along the way created excesses in the economy — it created excesses in financial markets” as asset prices moved higher, he said. 

The impact of the Federal Reserve’s aggressive rate hikes will move through the economy in the next 12 to 24 months, said Rowan, adding that he’d be surprised if inflation decelerates to 2% by the next election. 

Financial market participants will feel the pain, but other signals in the economy, such as unemployment levels, aren’t consistent with a recession, he said. 

“I don’t see us anywhere close to real demand destruction to get to what I would consider a traditional unemployment level recession.”

--With assistance from Allison McNeely.

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