Traders at the New York Stock Exchange [AFP Yonhap News]

Amid a surge in international oil prices and growing concerns over the default of private loans, the financial market situation is resembling the period just before the 2008 global financial crisis, Bloomberg News reported on the 13th (local time), citing Michael Hartnett, Chief Investment Strategist at Bank of America.

According to the report, Hartnett stated in an investor note the previous day, "The asset price trajectory in 2026 is eerily similar to the price movements between mid-2007 and mid-2008," adding, "Wall Street is ominously replicating the '2007-2008 equivalent market.'"

During 2007-2008, amidst the risk of subprime mortgage defaults, international oil prices rose from around $70 per barrel in mid-2007 to $147 per barrel in July 2008, driven by soaring demand from China and other countries, as well as speculative demand.

Recently, investor capital outflows have continued due to concerns over private loan defaults, and with the US-Iran conflict pushing international oil prices above $100 per barrel, fears of stagflation (economic recession amidst high inflation) are resurfacing.

Wall Street road sign in Manhattan [Reuters Yonhap News]

Hartnett assessed that the current US financial market is pricing in expectations that the Iran conflict will not be prolonged and that private loan issues will not escalate into a systemic crisis akin to a financial crisis.

He also analyzed that investors are maintaining asset price bullish positions, underpinned by the belief that policymakers will bail out Wall Street.

Amidst a rush of redemptions from private loan funds and concerns over corporate loan defaults, voices of caution regarding the spread of crisis are growing on Wall Street.

Previously, last month, when private loan manager Blue Owl Capital announced it would permanently suspend redemptions for one of its three funds, Mohamed El-Erian, advisor to Allianz Group, wrote, "Is this a 'canary in the coal mine' moment, similar to August 2007?"

Prior to the financial crisis, in August 2007, France's largest bank, BNP Paribas, abruptly suspended redemptions for three funds invested in US subprime mortgage-related assets, an event widely seen as a precursor to the Lehman Brothers bankruptcy in 2008.