IMF President: Asset valuations are approaching levels seen during the internet frenzy 25 years ago

IMF President Kristalina Georgieva stated that the rise in gold demand indicates that "the resilience of the global economy has yet to be fully tested." She also pointed out that the current monetary gold holdings of various countries have exceeded one-fifth of the world's official foreign exchange reserves. Additionally, she issued a warning about the "loose financial environment," but did not specify any particular market or country. This month, driven by the AI boom and rising stock prices of technology companies, major U.S. stock indices have reached historic highs. "Current asset valuations are approaching levels seen during the internet frenzy 25 years ago," she said. "If the market experiences a significant correction, tightening financial conditions could hinder global economic growth, expose potential risks, and make the situation particularly difficult for developing countries." Georgieva added that the loose financial environment "only masks rather than reverses some of the weakening trends, with the slowdown in job creation being one example." Regarding the U.S., she stated that a series of measures are needed to address the federal budget deficit, including "taking sustained actions beyond discretionary spending." At the same time, policies should incentivize household savings, such as expanding tax benefits related to retirement savings