Downward correction in asset prices: The three scenarios

It is impossible for asset prices (equities, real estate, company valuations, etc.) to be on a perpetual upward trend. We can imagine three scenarios leading to a downward correction in asset prices. The appearance of permanent rather than transitory inflation, leading to a rise in interest rates (if it occurs, which is not the case today, it can be quite rapid). A fall in savings, a shift to a situation of insufficient savings that would also drive up interest rates (the horizon here is quite long, 2025 to 2030?). An “endogenous” correction in asset prices: their excessive rise leads to a sudden downturn in demand for assets, leading to a decline in their prices (this scenario can occur at any time).