The ECB said in a Monday blog that excessive optimism in US technology stocks
linked to AI may be vulnerable to a market correction. Valuations of large tech
firms are well above historical averages, and overly optimistic sentiment can
amplify price falls beyond what rational scenarios would suggest. With fiscal
and monetary policy buffers limited, any correction could cause broader market
and economic spillovers that policymakers may find difficult to counter. The ECB
added timing is unpredictable and such boom‑and‑bust patterns are typically
identifiable only in hindsight.
