Despite the sobering pandemic news, global investors are upbeat, even giddy. Asset prices are surging. Stock prices rose nearly 30% last year and national home values were up by almost 20%. Other tried-and-true measures of asset price valuations, such as stock price multiples , corporate bond credit spreads and commercial real estate capitalization rates are also well outside historical bounds. Asset prices are thus highly vulnerable to a selloff, and the catalyst may well be the pending shifts in monetary policy.

Source: CNN January 24, 2022 17:58 UTC