The Bank of England sees future problems for the global financial markets if investors are turning to the prospects for artificial intelligence (AI) to come.
THE BankThe financial policy committee declared in its last update on the state of the financial system that there was also a risk of market correction by intensifying concerns about the independence of American central banks.
“The risk of strong market correction has increased,” he warned, while adding that the risk of “fallout” to these ribs of such a shock was “material”.
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The fears grew up that the IA-The stock market rallies focused on the United States are not durable, and there are signs that an increasing number of investors rush to hide against any correction.
It was seen early Wednesday when the price of gold spot exceeded the $ 4,000 per ounce level for the first time.
Analysts highlight the upward pressure of a global economic slowdown driven by the American trade war, the closure of the United States government continues and is concerned about the sustainability of the debt of the American government.
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The American government stops
The political crisis in France has also been cited as a reason for recent changes in gold.
The money has also left the US dollar since Donald Trump has moved to place his supporters at the heart of the American central bank, threatening on several occasions to dismiss his chair for having failed to reduce interest rates to support the economy.
Jay Powell’s mandate at the Federal Reserve ends next spring, but the White House, while moving to appoint its replacement, has already moved the power to vote and seeks to draw a single price, Lisa Cook, for alleged mortgage fraud.
She fights this decision before the courts.
The financial markets fear that monetary policy will no longer be independent of the federal government.
“A sudden or significant change in the perceptions of the credibility of the federal reserve could lead to a strong repair of assets in US dollars, especially in the markets of sovereign American debt, with the potential of increased volatility, risk premiums and global discharge,” said the Bank of England.
British government’s borrowing costs are closely correlated with the yields of the American treasury and both are currently raised, almost multi -year summits in some cases.
He presents Chancellor Rachel Reeves with a headache while preparing the field for the November budget, the higher yields reflecting the concerns of investors concerning a high loan and debt rate.
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“Does the bank worry about the risk of recession?”
On the AI, the bank said that 30% of the United States assessment S&P 500 had been made up of the five largest companies, the largest concentration in 50 years.
Sharing evaluations based on past profits were the most stretched from the Dotcom bubble 25 years ago, although it seemed less based on investors’ expectations for future profits.
A recent Massachusetts Institute of Technology report revealed that 95% of companies that had joined AI in their operations had not yet seen a return on investment.
“This, when combined with an increasing concentration within the market indices, leaves the particularly exposed markets if the expectations concerning the impact of the AI become less optimistic,” the statement said.