The IMF is warning that prices are frothy across a variety of assets, from stocks to government and corporate bonds. It’s unusual to see inflated valuations across so many asset classes, Adrian said.
“The last time we saw that was in the runup to the financial crisis,” he said. “We see stretched valuations across asset classes and across regions of the world, from advanced countries to low-income countries, from Asia to Africa to the Americas.”
The bright side is that economies are better prepared for the next downturn than a decade ago, Adrian said. “What is different today is the banking system is much more resilient, there’s a lot more capital and a lot more liquidity,” he said. “So we’re not quite as worried as we would have been."
This article was provided by Bloomberg News.