European Central Bank (ECB) researchers warn: If the US stock market's AI rally corrects, the Eurozone could face severe shocks with limited policy space to respond
Economists at the European Central Bank (ECB) published a blog post on the bank's website on Monday, stating that after a rapid surge in tech stocks, the risk of a market correction is accumulating. They believe that once the AI rally in US stocks adjusts, it could severely impact the Eurozone economy through various channels, including direct equity holdings and market sentiment transmission. The researchers emphasized that compared to the dot-com bubble era, Eurozone policymakers currently have "significantly less" monetary and fiscal space to respond to market turbulence.
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