Bank of England Warns Global Stock Markets Are Overvalued and Will Fall
Sarah Breeden, deputy governor for financial stability at the UK's central bank, warned that international equity markets are priced too high and will experience an adjustment at some point, citing concentrated macroeconomic risks in a market near all-time highs.
UK Central Bank Signals Market Overvaluation
International equity markets are priced too high and will fall, according to a senior leader at the Bank of England. Sarah Breeden, deputy governor for financial stability at the U.K.'s central bank, told the BBC in an interview published Friday that macroeconomic risks were not fully priced into equity markets.
"There's a lot of risk out there and yet asset prices are at all-time highs," she said. "We expect there will be an adjustment at some point."
Key Concerns
The thing that really keeps me awake at night is the likelihood of a number of risks crystallizing at the same time — a major macroeconomic shock, confidence in private credit goes, AI and other risky valuations readjust.
It is unusual for Bank of England officials to be so candid about expectations for capital markets.