The air is becoming treacherously thin for global asset markets and investors should start cutting their exposure before central banks shut off emergency stimulus, Citigroup’s star economist has warned.

“There are clearly signs of late-cycle froth in financial markets, in everything from equities, to corporate credit, and real estate, especially in the US. There is the risk of an overdue correction,” said Willem Buiter, the bank’s chief economist and a leading theorist on monetary policy.

“We are reluctant to call an end to the bull-market in risk assets just yet but a considerable degree of caution is now warranted. Downside risks are rising as the business cycle matures,” he said.

Prof Buiter said seven of the biggest central banks will raise interest rates this year, while quantitative easing will go into outright contraction. Net bond purchases will fall to zero over coming months as the "Great Taper" gathers force, down from $180bn (£132bn) a month in mid-2016.

The US Federal Reserve is leading the charge, with plans to shrink its balance sheet at an accelerating pace, reaching $50bn a month by the end of this year. “Tighter monetary and financial conditions are a major risk. We think the direct effect of global tapering on the real economy is limited, but major asset market corrections could trigger or cause a global slowdown,” he said.