Part 6/12:
The Anticipated Outcomes: A Market Bubble in the Making?
Many prominent economists, including Ray Dalio, founder of Bridgewater Associates, have sounded alarm bells about this cycle. Dalio warns that quantitative easing in an environment of high stock prices, large fiscal deficits, and persistent inflation risks creating an 'inflationary bubble.' The risk is that continuous liquidity infusion will propel asset prices higher and higher—a phenomenon known as a "meltup"—until inflation spirals out of control, forcing the Fed to slam the brakes with aggressive rate hikes, leading to a severe market correction.