Economists warn AI bubble may be about to burst

Analysts at Capital Economics believe markets are in the late stage of a bubble due to overcapitalization of the AI boom: eight indicators are at historical peaks. The Fed may raise rates as core inflation falls to a post-pandemic low in August.

• Capital Economics: eight market indicators at critical levels
• Equity and debt issuance rising, capitalization concentrated in a few tech giants
• Core CPI inflation in August — lowest since the pandemic
• UBS expects Fed rate hike as inflation forecast is lowered — first in history