Wall Street has been running on hope since the election of President Donald Trump, says visiting United States economist David Blitzer.
But that doesn't necessarily make a crash inevitable.
"Many people feel [stocks] have out run the fundamentals," he says. "The only way to justify it is to say that much of the market has assumed that all of the promises of the Republican Party and the new President are going to come to pass."
New York-based Blitzer, who is in New Zealand for a series of speaking engagements, is managing director and chair of the index committee at S&P Dow Jones Indices. He has responsibility for index security selection, as well as index analysis and management for thousands of market indices around the world - including for the NZX and ASX.
Blitzer has been analysing the US economy and markets for decades. In 1998 he was named the nation's top economist, receiving the Blue Chip Economic Forecasting Award for most accurately predicting the country's leading economic indicators for four years in a row.
He says the past 10 years of economics had been the most interesting he has ever seen.
"From the start of the financial crisis until recently all the discussion has been about the economy, how to handle the recovery, monetary policy, what should central banks do," he said. "It has been heavily technical economics . . . fascinating stuff."
But there has been a major shift in the past nine months, he says.
"The shift began with Brexit in the UK in June of last year and accelerated with Donald Trump's election. We've moved away from technical economics and into what we used to call political economy."
That means the variables are now much greater, he says.
But at opposite ends of a spectrum of possibilities are a scenario where Trump achieves most of his policies - around tax cuts and infrastructure spending - and a scenario where he achieves very little.
We have already seen markets falter in the past week with Trump's failures on healthcare and there is growing scepticism about his ability to deliver, he says.
That has woken people up to the idea "that yes, it really was running on hope", he says.
"It's going to take well into the fall [NZ spring] until we get a clear signal. We have tax reform coming up, we have budgets coming up."
Despite the risks Blitzer isn't completely bearish on markets and says a stock market crash isn't inevitable.
The fundamentals of the US economy are now very strong and the stage is set for the bull run to continue, he says.
"Even if we get a market correction of say 10 per cent, that doesn't mean the end of it," he says.
"You have to have a huge problem to really stop the US economy dead. So I think the economy is reasonably safe through this year and beyond. But the politics we experience in the next nine or 10 months are really going to determine how the economy looks in 2018, 19 and 20."