📈 IMF Warns of AI Slowdown, Spiking Bond Yields & Cyber Risks to Global Markets

The International Monetary Fund (IMF) warned in its latest Global Financial Stability Report against market complacency, identifying key near-term catalysts that could trigger systemic market disruptions: • AI Sector Vulnerabilities: A potential drop in AI profits or investment momentum could trigger asset price selloffs. Debt risks have grown, with hyperscalers accounting for 10% of global investment-grade bond issuance (up from <1% in 2024). • Rising Bond Yields & Debt Burdens: Escalating energy prices, high sovereign debt, and fiscal deficits threaten to spike government bond yields, increasing rollover costs for debt-reliant nations—a factor closely monitored by emerging economies navigating external debt sustainability. • Cybersecurity Threats: Over 70% of software vulnerabilities in 2026 were exploited before patches were available (up 20 percentage points YoY). A severe attack on key financial infrastructure risks market-wide disruption. • Global Banking Resilience: Stress tests indicate overall bank capital remains robust, though "pockets of weakness" expanded, with vulnerable assets rising to 22% of global banking assets (up from 18% in 2025). _Source: Based on provisional data from the IMF Global Financial Stability Report._