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Bank of England warns of 'sharp correction' for markets if AI bubble bursts
The Bank of England highlights that 30% of the US S&P 500 valuation comes from five companies amid rising risks of AI progress delays and heightened market volatility.
- On October 2, the Bank of England's Financial Policy Committee warned the risk of a sharp market correction has increased, releasing the minutes Wednesday.
- On AI, the Bank noted that 30% of the US S&P 500's valuation is held by its top five companies, while many investors are rushing to hedge amid soaring tech valuations over the past year.
- Officials warned downside risks include `disappointing` AI adoption, increased competition, and supply chain bottlenecks; MIT found 95% of businesses integrating AI had no returns.
- While judging domestic resilience, the FPC said UK households and businesses remain resilient and maintained the UK countercyclical capital buffer rate at 2%, despite risks from a global sell-off.
- The committee also highlighted elevated risks from geopolitical tensions, global fragmentation, and pressures on sovereign debt, while term premia in sovereign bond markets have risen amid concerns over Federal Reserve independence.
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24 Articles
24 Articles
Coverage Details
Total News Sources24
Leaning Left5Leaning Right5Center9Last UpdatedBias Distribution48% Center
Bias Distribution
- 48% of the sources are Center
48% Center
L 26%
C 48%
R 26%
Factuality
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