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news analysis
Some experts see a dangerous combination of factors reminiscent of practices that led to previous financial crises.
Patricia Cohen, the global economics correspondent, is based in London.
Nov. 25, 2025, 10:45 a.m. ET
The stock market bounces in recent weeks are just one indicator of the profound uncertainty and heightened risks running through the global economy and financial system.
It’s not simply that the hundreds of billions of dollars flooding into artificial intelligence investments might turn out to be a bubble. Or that the use of cryptocurrencies in mainstream banking is spreading even as their values have plunged after soaring to record highs. Or the billion dollar bankruptcies related to a mad rush of lending by shadow banks.
It is also the titanic levels of debt that the United States and other governments have built up. President Trump’s erratic policy zigzags. And the possibility that the cornerstone of the administration’s economic agenda — tariffs — could be ruled unconstitutional by the U.S. Supreme Court.
It’s everything, everywhere, all at once.
“I have just been flabbergasted that market measures of volatility have been so low up until recently,” said Kenneth Rogoff, a professor of economics at Harvard University. Market valuations are not accurately reflecting risks, he said.
The stock market run-up — the S&P 500 is still up about 14 percent this year despite the recent shivers — could foreshadow widespread economic gains. But Mr. Rogoff doesn’t think that is the case.
“A big part of the high stock prices is not a reflection of high future growth,” he said. Rather, it is a sign that A.I. is expected to boost productivity and shrink employment. “The firms all think they’re going to shed a lot of labor, and that’s why the profits will be high,” he said.
