Macro strategist Henrik Zeberg believes that the current economy is experiencing an expansive “everything bubble” that shows no signs of slowing down. With a significant following on the social media platform X, Zeberg points out that the bubble’s blow-off top has not yet been reached.

Using Market Capitalization to GDP ratios from historical bubbles, Zeberg highlights that the current level of 188% is unprecedented. He also factors in the Crypto Bubble and Private Equity Bubble, warning that when a recession hits, the “Everything Bubble” will burst.

In the private markets, assets under management have seen remarkable growth, rising from $9.7 trillion in 2012 to an estimated $24.4 trillion by the end of last year, according to analysis from Ernst & Young (EY).

Zeberg notes that central banks like the Federal Reserve and the European Central Bank tend to cut rates before a recession. By interpreting recent rate cuts by the ECB as a sign of a late-cycle period, Zeberg questions whether we are on the brink of a new economic expansion or heading towards a recession.

With the Federal Reserve set to make a statement on the Federal Funds Rate at the upcoming FOMC meeting on June 12th, it is anticipated that rates will remain unchanged.

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