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- The expression "everything bubble" refers to the correlated impact of monetary easing by the Federal Reserve (and followed by the European Central Bank and the Bank of Japan) on asset prices in most asset classes, namely equities, housing, bonds, many commodities, and even exotic assets such as cryptocurrencies and SPACs. The term is related to the Fed put, being the tools of direct and indirect quantative easing that the Fed used to execute the monetary easing, and to modern monetary theory, which advocates the use of such tools, even in non-crisis periods, to create economic growth through asset price inflation. The term first came in use during the chair of Janet Yellen, but it is most associated with the subsequent chair of Jerome Powell, and the 2020–2021 period of the coronavirus pandemic. The everything bubble was not only notable for the simultaneous extremes in valuations recorded in a wide range of asset classes and the high level of speculation in the market, but that its peak in 2021 occurred in a period of recession, high unemployment, trade wars, and political turmoil – leading to a realization that the bubble was a central bank creation, with concerns on the independence and integrity of market pricing, and on the Fed's impact on wealth inequality. In 2022, financial historian Edward Chancellor said "central banks' unsustainable policies have created an 'everything bubble', leaving the global economy with an inflation 'hangover'". Rising inflation did ultimately force the Fed to tighten financial conditions during 2022 (i.e. raising interest rates and employing quantitative tightening), and by June 2022 the Wall Street Journal wrote that the Fed had "pricked the Everything Bubble". In the same month, financial journalist Rana Foroohar told the New York Times, "Welcome to the End of the 'Everything Bubble'". (en)
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| rdfs:comment
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- The expression "everything bubble" refers to the correlated impact of monetary easing by the Federal Reserve (and followed by the European Central Bank and the Bank of Japan) on asset prices in most asset classes, namely equities, housing, bonds, many commodities, and even exotic assets such as cryptocurrencies and SPACs. The term is related to the Fed put, being the tools of direct and indirect quantative easing that the Fed used to execute the monetary easing, and to modern monetary theory, which advocates the use of such tools, even in non-crisis periods, to create economic growth through asset price inflation. The term first came in use during the chair of Janet Yellen, but it is most associated with the subsequent chair of Jerome Powell, and the 2020–2021 period of the coronavirus pan (en)
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