Are Markets in a Bubble? Top Economists See Strength — With Caveats

Fears of a looming market bubble have returned as stock prices climb and artificial intelligence spending accelerates, but several leading economists argue that the broader economic picture remains more stable than the headlines suggest. From Wall Street valuations to U.S. growth and global resilience, their message is consistent: conditions look stretched in places, but not fundamentally broken.

Is the Boom Built to Last? 3 Economists Weigh In on Markets and Growth

In recent remarks and papers, Owen Lamont, Jared Bernstein and Kristalina Georgieva each offered perspectives that temper bubble anxiety while acknowledging real risks heading into 2026.

Lamont, a portfolio manager at Acadian Asset Management, recently told Forbes that while U.S. equity markets appear expensive and sentiment is elevated, the conditions for a full-fledged bubble are still incomplete. His comments were reported by Forbes writer Nick Lichtenberg.

“Part of the reason I think there’s not a bubble is I don’t see the smart money as acting like there’s a bubble,” Lamont explained Fortune on Sunday. “Maybe I should say there’s not a bubble yet.”

Lamont argues that true bubbles are defined not just by high prices or enthusiastic investors, but by insider behavior. Historically, he says, bubbles peak when corporate executives and early backers rush to sell shares to the public through IPOs and secondary offerings. That dynamic, he notes, has yet to emerge at scale in the current cycle.

Instead, U.S. companies have continued to reduce share counts through buybacks, a pattern Lamont describes as inconsistent with panic or mass overvaluation. While he concedes that valuations are elevated and retail participation has increased, the absence of heavy equity issuance keeps him from labeling the current market a bubble.

Jared Bernstein Sees U.S. Economy Holding Its Ground Into 2026

At the same time, Bernstein’s assessment of the U.S. economy points to continued momentum beneath the market debate. Bernstein is an American economist who took the helm as chair of the United States Council of Economic Advisers under President Joe Biden, holding the post from 2021 through 2025.

In a Stanford University paper examining 2026, Bernstein highlighted the economy’s ability to withstand higher interest rates, policy uncertainty and structural change while maintaining growth.

According to Bernstein, consumer spending, real wage gains and productivity improvements have helped offset a cooling labor market. While job growth has slowed, he describes the environment as a low-hire, low-fire equilibrium rather than a downturn, with the economy still expanding at a sustainable pace.

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Bernstein also notes that concerns over an AI-driven stock market bubble have not yet translated into broader economic damage. While asset prices can amplify wealth effects, he argues that productivity gains and ongoing investment continue to support underlying growth heading into 2026.

IMF’s Georgieva Says Global Economy Has Absorbed Repeated Shocks

On the global stage, Georgieva struck a similar tone at the 2026 World Economic Forum (WEF) in Davos, emphasizing that the world economy has absorbed repeated shocks more effectively than expected. Speaking to policymakers and business leaders, she said global growth has remained resilient despite geopolitical tension, trade disputes and financial tightening.

Georgieva attributed that durability to private-sector adaptability, steady policy responses from central banks and the gradual diffusion of new technologies. While she acknowledged rising public debt and uneven growth across regions, she framed those challenges as manageable rather than destabilizing.

Taken together, the three views suggest a common thread: markets and economies are navigating a period of adjustment, not collapse. Elevated valuations, slowing job growth and global uncertainty all present risks, but none, in their view, amount to a systemic breakdown.

For now, the expansion continues — and economists watching closely say the difference between a boom and a bubble still comes down to behavior, not just price levels.

FAQ 🫧

• Do economists think the stock market is in a bubble?
  No, they say key signals like large-scale insider selling and IPO issuance are still missing.
• Is the U.S. economy expected to grow in 2026?
  Yes, economists including Jared Bernstein expect continued growth despite a slower job market.
• How resilient is the global economy right now?
  IMF Managing Director Kristalina Georgieva says the global economy has withstood recent shocks better than expected.
• What risks remain for markets and growth?
  High valuations, public debt and uneven adoption of new technologies remain areas to watch.