Five Potential Bubbles That May Be About to Burst
If you own your home, you may have noticed that the roof above your head has been growing more valuable at a startling rate. Almost every part of the property market – some London flats excepted – is booming. Prices in June were up more than 13pc on the year, the fastest pace since 2004 . It is not only homes which are getting more expensive. Stocks, bonds, commodities and more have all seen sharp price moves since Covid struck. Heady rises in assets certainly make investors feel good and raise hopes the economy is on the right track, often in a self-reinforcing cycle. But when everything is going up, twitchy markets can suddenly turn, alert for anything which could knock the rebound off course or burst what turns out to be a bubble. The Federal Reserve could bungle the end of quantitative easing , causing a 2013-style taper tantrum. Inflation’s surge could be sustained, forcing higher interest rates . Another Covid wave could shock markets out of their optimism...