Sarah Breeden is the head of financial stability in The Bank of England, and as such a true heavy hitter in the financial world. Apparently it's very rare for deputies of a country's central bank to issue warnings about the stock market.
She refuses to elaborate on when a sharp downturn might happen, or how big such a move would be, but says "The thing that really keeps me awake at night is the likelihood of a number of risks crystallising at the same time – a major macroeconomic shock, confidence in private credit goes, AI and other risky valuations readjust - what happens in that environment and are we prepared for it?".
So, is this just a boomer being alarmist trying to make sense of the market through the lens of old market truths and not understanding the regardedness of the modern market, or is it time to start hedging? Puts on the Bank of England?
