Federal Reserve Urged to Probe AI Stock Valuations With 400 Economists
Updated
Updated · CounterPunch · May 27
Federal Reserve Urged to Probe AI Stock Valuations With 400 Economists
6 articles · Updated · CounterPunch · May 27
About 400 Federal Reserve economists could be tasked with testing whether current stock prices align with projected GDP and profit growth, in a bid to determine if an AI-driven bubble is forming.
The proposal argues valuations make sense only if investors accept very low future returns or expect far stronger growth and a bigger shift from wages to profits than widely assumed.
A Fed-backed assessment could pressure fund managers to confront bubble risks more directly, because they could no longer dismiss warnings as coming from a small group of skeptics.
The call draws on the damage from the 1990s tech bust and 2000s housing crash, arguing that earlier failures by highly paid investment managers brought little accountability despite losses of 20% to 40%.
With AI stocks soaring, can Federal Reserve warnings alone prevent the next market crash?
The California housing market shows classic bubble signs; is another 2008-style collapse already underway?
Why do Wall Street managers who lose billions evade consequences while workers lose their life savings?