The Triple Market Crash Ahead: Michael Pento Predicts Big Trouble!

24th November, 2025

The United States is now drifting toward a triple market crash because the economy has been propped up for more than a decade by unprecedented monetary distortion. The Federal Reserve, convinced it could manufacture stability through perpetual intervention, suppressed interest rates, expanded its balance sheet beyond any historical precedent, and reshaped the price of nearly every major asset in the country.

Housing, equities, and bonds all inflated together because they were all fed from the same unnatural source of cheap and abundant credit.

What has emerged is an economy held together by momentum rather than fundamentals, an economy in which valuations, borrowing habits, and even personal financial expectations rest on the assumption that artificially low interest rates would last forever. But the environment that supported these illusions has vanished. Inflation persists, debt loads have exploded, and the cost of money has returned to something resembling historical reality. The problem is that the country is no longer structured to function in that reality.

This is why the coming recession is not merely cyclical. It is structural. And as Michael Pento emphasizes, when all three markets are inflated by the same force, they do not correct independently, they break together.

Housing: The Frozen Market

Among the three major markets now entering a period of severe instability, housing is the most visibly distorted, even if it is not yet the most violently adjusted.

Pento emphasizes that the housing market’s apparent strength is an illusion created by immobilization. Millions of homeowners are locked into mortgage rates between two and three percent, rates that no longer exist in the real world. These owners cannot sell without condemning themselves to mortgage payments that may be double or triple their current levels. As a result, the supply of homes has collapsed to historically low levels, and prices have remained elevated not because demand is strong but because the market is paralyzed.

This paralysis deceives observers into believing the housing sector is resilient. In truth, it is suffocating. Affordability has deteriorated to the worst levels ever recorded. Young families cannot buy. Investors who purchased second or third homes with cheap financing now face carrying costs that undermine profitability.

Builders sense the shift in sentiment and have begun offering incentives and discounts that rarely appear during genuine periods of strength. Yet home prices remain superficially high because there are almost no transactions, and without transactions, price discovery disappears.

Pento argues that housing corrections always begin this way. First the market freezes, then it cracks. Forced sellers eventually enter the picture because life continues regardless of mortgage rates. People lose jobs, relocate, divorce, retire, or pass away. Landlords with adjustable-rate loans face rising costs that their tenants cannot cover. Small investors who bought homes expecting easy returns run into negative cash flow and begin exiting. Once inventory begins rising, even modestly, price declines accelerate because the market has been held in an artificially static position for too long.

The delusion that home prices can permanently defy the relationship between incomes, savings, and borrowing costs has appeared before every major housing downturn in American history. It appeared in 2006. It appeared in the late 1980s. It appeared in the 1970s. It is appearing now. What makes the current cycle more dangerous is the scale of the rate distortion. Mortgage rates under three percent were never natural; they were manufactured. And the market built on top of that fabrication will have to be rebuilt once it breaks.

Stocks: The Bubble That Mistook Cheap Money for Skill and Corporate Debt for Growth

If housing is the most visibly distorted market, the stock market is the most dangerously complacent. Pento argues that equity valuations today reflect a world that ceased to exist the moment inflation reappeared.

For more than a decade, corporations operated under the assumption that money had no cost. They borrowed aggressively to fund share buybacks, to acquire competitors, and to expand into ventures that offered more spectacle than substance. Investors rewarded these behaviors because they inflated earnings per share, not because they created durable streams of cash flow. The stock market became a monument to financial engineering.

Now the bill for that behavior has arrived. Corporate debt accumulated during the era of cheap credit is rolling over at far higher interest rates. Companies that once refinanced at two percent now face refinancing at five or six. Margins contract under that pressure. Buybacks slow or disappear entirely because cash must be redirected toward servicing debt.

Earnings projections that once relied on endless liquidity become untenable in a world where capital has a real price again. Yet equity valuations remain elevated as if these realities do not exist.

The market’s dependence on a handful of mega-cap technology companies masks the fragility of the underlying system. These companies’ outsized performance distorts major indices, creating the illusion of broad strength while the majority of industries struggle under rising costs and slowing demand. Pento’s warning is that concentration is not a sign of robustness but of exhaustion.

Investors still believe the Federal Reserve will rescue them, because that is what the Fed has done since the late 1980s. Pento insists that this belief is now outdated. The Fed cannot cut interest rates aggressively without reigniting the very inflation that forced it to tighten in the first place.

Structural inflationary pressures, including demographic shifts, rising commodity cycles, supply-chain fragmentation, and political unwillingness to reduce fiscal deficits, ensure that inflation will not simply disappear. In such an environment, easing monetary policy is not a solution; it is a trap.

Bonds: The Heart of the Crisis

While housing is the most visible and equities the most dramatic, the bond market is the most fundamental and the most perilous. Pento frequently reminds observers that the bond market is where the true crisis resides because it reflects the solvency and credibility of the United States government itself.

For decades, the federal government borrowed with impunity, convinced that interest costs would remain trivial forever. Those days have ended. The federal budget now faces an interest-expense spiral that threatens to consume every other priority. Trillion-dollar deficits have become a fixture rather than an anomaly, and they persist even in periods that are nominally described as economic expansion.

Inflation has forced the Fed to reduce its balance sheet rather than expand it, depriving the Treasury of its most reliable buyer.

Foreign demand for U.S. debt has weakened as geopolitical pressures rise and as countries diversify their reserves. Domestic buyers cannot absorb the growing flood of issuance without demanding higher yields, and that will cause a severe liquidity crisis.

Pento’s central point is that bond prices can fall even during a recession (the opposite of what investors have been conditioned to expect) because the supply of debt is now so immense that it overwhelms normal recessionary demand. In other words, the government must borrow so much that the usual safe-haven bid cannot support prices.

This dynamic undermines the very foundation of the modern financial system. Treasury yields influence mortgage rates, corporate borrowing costs, and asset valuations across the entire economy. When those yields rise because the government’s fiscal position deteriorates, the ripple effects spread everywhere.

Rising yields depress housing affordability. They compress stock valuations. They force banks to absorb losses on bond portfolios. They widen credit spreads. They slow investment. They strain government budgets at the state and municipal levels. When the U.S. bond market loses stability, everything loses stability.

Why All Three Markets Are Destined to Fall Together

Traditional financial thinking assumes that the major markets offset one another. When stocks fall, bonds rise. When housing falters, equities offer opportunity. When bonds weaken, real estate picks up the slack. That worldview depends on the assumption that each market responds to different forces.

Pento’s argument is that this assumption no longer holds. All three markets inflated because they were fed by the same source: artificially cheap money that caused money illusion. All three therefore must deflate when that money is withdrawn. This is the defining characteristic of the modern environment and the reason the coming downturn will be unlike any in recent memory.

In an Austrian economic framework, malinvestment created by distorted interest rates accumulates across sectors simultaneously. It appears first in long-duration assets, then in equities, then in sovereign debt, and finally in the real economy.

Once inflation forces the cessation of stimulus, the entire structure becomes vulnerable. This is why the current environment feels unstable even when headline data suggests growth. The growth is not organic; it is the lingering momentum of a system built on cheap financing.

Pento’s view is that the unwinding will not follow the comforting sequence investors expect. It will not be a story of one market declining while another offers shelter. It will be a synchronized correction because the distortions were synchronized. That is the essence of the Triple Market Crash.

How the Unraveling Is Likely to Unfold

The pressure building inside the housing, stock, and bond markets is not isolated; it is sequential and mutually reinforcing. Once one pillar gives way, the others weaken under the weight of the same structural imbalances. The cadence of the downturn is not difficult to map because the mechanisms driving it are already visible. Based on the distortions Michael Pento highlights, the unraveling is most likely to proceed in the following manner:

Housing begins to crack as forced sellers enter a market that can no longer rely on low supply to mask collapsing affordability. Inventory rises, prices soften, and the illusion of stability breaks.
Equities follow as corporate margins shrink under the burden of higher refinancing costs and slowing consumer demand. Earnings disappoint, buybacks retreat, and valuations that were defensible only under zero-rate conditions begin to contract.
Bonds become the final stage of the correction as the government’s record-breaking issuance collides with weakening investor demand. Yields rise to attract buyers, pushing prices lower and amplifying the stress across financial markets.

These developments do not occur in isolation. Each market’s decline tightens financial conditions further, which accelerates the deterioration in the others. Housing weakness bleeds into consumption; falling stock prices undermine investor confidence and retirement balances; rising bond yields strain government finances and corporate refinancing cycles simultaneously.

What begins as a correction in one market spreads outward until the entire structure reflects the underlying reality that was masked for more than a decade.

This sequence is not merely theoretical. It is the predictable outcome of an economy stretched far beyond its natural limits, one that depended on artificially cheap credit to function and now must confront the consequences of its withdrawal.

The End of an Era of Monetary Illusion

What Pento ultimately describes is not a typical recession or a routine correction but the end of an era defined by the belief that central banks could replace real savings, real investment, and real market discipline with endless liquidity.

The Triple Market Crash represents the point at which financial engineering encounters the limits of arithmetic. It is the moment when the accumulated distortions of a decade and a half must be confronted rather than postponed. It marks the end of the money illusion fantasy that prosperity can be printed, and the restoration of the economic truth that prosperity must be earned.

The correction ahead will not be comfortable, and it will not be quick. It is the necessary outcome of a system that ignored risk, mispriced capital, and rewarded speculation over production. Pento’s warning is not a prediction of doom for its own sake but a reminder that reality, however delayed, asserts itself with force. When artificially inflated markets finally realign with the underlying economy, the adjustment is always more severe than the policymakers who created the distortion ever imagined.

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