Stock markets are too high and set to fall, says Bank of England deputy
Summary
The Bank of England’s deputy governor, Sarah Breeden, said global stock markets are very high and likely to fall. She warned that many economic risks are not being reflected in current share prices and said the financial system must be prepared for a possible drop.Key Facts
- Stock markets worldwide are at or near record highs, despite facing many risks.
- Sarah Breeden is the Bank of England’s deputy governor and head of financial stability.
- She expects a market adjustment but did not specify when or how much prices might fall.
- Risks include a major economic shock, problems in private credit (called shadow banking), and overvalued tech and AI companies.
- Private credit has grown to $2.5 trillion but has not been tested in a big crisis.
- The US stock market has hit all-time highs partly due to investments in AI, while the UK’s FTSE 100 is close to its record high.
- Some experts compare today’s AI investment surge to the late-1990s dotcom bubble.
- Breeden’s focus is on making sure the financial system can handle a market drop if it happens.
Read the Full Article
This is a fact-based summary from The Actual News. Click below to read the complete story directly from the original source.