Bitcoin price today: climbs to $111k amid easing trade jitters, cooling inflation
Investing.com -- Ed Yardeni believes that while financial bubbles are forming across markets, their eventual bursting is unlikely to cause a crash or recession.
Instead, he sees them as healthy corrections that could reset valuations and create new buying opportunities.
“There are bubbles out there. They will burst because that’s what bubbles do,” Yardeni Research wrote in a note.
“However, they are unlikely to follow the script of the Great Financial Crisis. They are more likely to create buying opportunities in various asset markets.”
Yardeni dismissed current “everything bubble” fears as overblown, recalling that similar concerns during the pandemic era did not lead to lasting damage.
“Numerous bubbles burst, but they didn’t cause a financial calamity or a recession,” the note said. “Here we are today, with U.S. real GDP at a record high.”
While margin debt has climbed above $1 trillion and S&P 500 valuations appear stretched, Yardeni argued these conditions mirror previous cycles that resolved through brief corrections. “These selloffs provided great buying opportunities,” he wrote.
The report also highlighted speculation around “a bubble in capital spending on AI infrastructure,” but Yardeni said comparisons to the 1999 telecom bust are misplaced because “much of the funding today is coming out of the strong cash flows of the hyperscalers.”
Even with some seeing bubbles in assets ranging from Bitcoin to gold, Yardeni remains optimistic.
“The economy has demonstrated its resilience since the pandemic,” the note said. “It is likely to remain resilient through the end of the Roaring 2020s.”