Janet Yellen told US lawmakers worried about the health of the economy last year that expansions do not die of old age. As the bull market in stocks enters its eighth year and shows little signs of slowing there are growing signs that the Federal Reserve chief may be on the money.
Conventional wisdom argues that a lack of volatility in markets coupled with high asset prices reflects growing complacency among investors, making an aging expansion increasingly vulnerable to a turn.
But the view that age determines when boom turns to bust has come under question in an era of abnormally low interest rates and at a time when central bankers are struggling to combat anaemic readings of output, productivity and wage growth. Forecasts by the International Monetary Fund predict the global growth recovery after the financial crisis of 2008 will continue. Equities have remained far more attractive than debt in investors' search for yields.
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