Prominent Economist Identifies Two Major Concerns That Disturb His Sleep

Concerns about Inflation: Economist Steve Hanke warns that inflation may spiral out of the Fed's control by 2026, citing a significant increase in the money supply and recent Fed rate cuts as potential contributors to rising prices.

Stock Market Bubble: Hanke believes there is a bubble in AI stocks, indicating that current high valuations in the tech sector could lead to a market crash, similar to the dot-com bubble.

Fed's Monetary Policy: The end of quantitative tightening and easing of lending rules could further increase the money supply, exacerbating inflationary pressures in the economy.

Investment Advice: Hanke advises investors to rebalance their portfolios in light of the potential risks associated with high stock prices and the uncertain inflation outlook.