Legendary investor Grantham warns that the AI bubble will eventually burst and the United States will fall into recession

Legendary investor Jeremy Grantham, who has twice accurately predicted market crashes, released a report titled “The Great Paradox of the U.S. Market” on Monday, issuing the latest warning about the stock market bubble and the U.S. economic outlook. Grantham said that the massive pandemic stimulus blew a multi-asset bubble in 2021, and as he expected, the bubble narrowed significantly in 2022. However, the launch of ChatGPT “rudely interrupted” this process, creating a whole new bubble for artificial intelligence. But this bubble will eventually burst, just like the dot-com bubble. In addition, Grantham said the delayed impact of the Fed’s rate hikes, combined with “ridiculous speculation” from 2020 to 2021 and from November to now, is likely to “end up in a recession.”