BIS Review 139/2010  1  As we now know, the dot-com bubble had actually started to deflate by the time those words were printed. The NASDAQ share index had already fallen by about 25 per cent from its early 2000 peak. By early in 2001 the US Federal Reserve would be cutting interest rates as the US economy went into recession.
The new economy – the latest (but not the last) in a long line of new paradigms – still had a business cycle after all. The Australian dollar would fall further in 2001, reaching a low point of about US48 cents in early April. Some felt that it might fall as far as US30 cents.