(Revised March 6, 2026)

Previous research has argued that asset booms should act like aggregate demand shocks in raising both goods prices and output. Historically, though, asset booms have tended to occur in periods of low inflation. To explain this pattern, I embed the Harrison and Kreps (1978) model of speculative trade in a monetary model based on Rocheteau, Weill, and Wong (2018). I show that a shock that leads to a speculative boom results in higher output but a lower price level. The model implies that a monetary response to this shock cannot simultaneously stabilize output, the price level, and real asset prices. A financial stability mandate may thus conflict with a mandate to stabilize output and good prices.