(2 December 2025 – United States) Signs of emerging asset bubbles have increased in 2025 amid strong investor risk appetite, elevated market valuations, resurgent artificial intelligence (AI) capital expenditure and sustained private credit growth, Fitch reports.
The contrast between the favourable funding and liquidity environment and an apprehensive macroeconomic outlook emphasises the growing risk of an asset bubble.
“Fitch’s economic and credit base case does not include a sudden and material downturn either from a recession nor a capital markets shock that would result in a sudden tightening of funding and liquidity conditions” commented Fitch Senior Director, Credit Commentary and Research, Justin Patrie.
“However, the emergence of bubble-like attributes in several sectors raises the potential for new risk scenarios that could have a material effect on global credit. As a result, we have published a number of reports pertaining to specific bubble risk themes and systemic tensions, evaluating the potential transmission risks to credit and exposed sectors.”
“These themes include stretched market valuations and investor exuberance resulting in weakening lending standards; the outsized and growing significance of the AI-related investment boom for the global economy and capital markets; the long run growth in private lending and the potential for unknown or hidden areas of leverage to develop and growing vulnerabilities to sovereigns in certain developed markets resulting from high and rising debt.”
The Fitch report “Bubble Risks and Systemic Tensions: Q&A” provides an overview of Fitch’s analysis on bubble risks, including answers to the most frequently asked questions on major bubble risk themes.