(Bloomberg) -- BlackRock Inc. Vice Chairman Philipp Hildebrand said this week’s market chaos surrounding shorted stocks was a bubbly side effect of mass liquidity and the pandemic would remain the ultimate driver of prices.

“It is not surprising when you think about how much liquidity is in the system, how much policy has fueled asset prices in recent weeks and months,” he said in a Bloomberg Television interview Thursday. “To me this looks like pockets of frothiness, some irrationality undoubtedly, some nonsense undoubtedly.”

Heavily shorted companies have become big targets of retail investors, after an epic short squeeze in GameStop Corp. helped drive up the stock more than 400% this week. The shares took a pause from their meteoric ascent on Thursday morning, after a brief outage of the Reddit forum whose users have fueled the stock’s surge.

“You have to step back and ask yourself if there is a fundamental reassessment of the market outlook -- I would say at this point probably not,” said Hildebrand. “The biggest risk right now remains the pandemic and vaccine administration. Of course we have corners, pockets of frothiness in the market.”

Hildebrand, a former Swiss central banker, also reiterated that markets are probably underestimating global inflation dynamics. He said in November that he doesn’t share the widely-held view that “inflation is dead.”

“We are going to see long-term effects from the shift to sustainability, which we think is tectonic, a very significant shift,” he said, “That is going to be inflationary.”

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