IMF warns AI sell-off; Soaring bond yields could trigger global market turmoil

The International Monetary Fund (IMF) has warned that rising government bond yields, soaring AI investment correction, or a major cyberattack could trigger global financial turmoil. In its latest Global Financial Stability Report, the IMF identified these three factors as plausible near-term triggers of tighter financial conditions and wider market disruption.

While each risk might be manageable on its own, the IMF cautioned that they could expose underlying vulnerabilities with broader systemic consequences. The Fund also highlighted growing leverage in the AI sector, which could amplify a slowdown in investment by forcing investors to sell assets, increasing volatility across financial markets.

The IMF urged policymakers to curb excessive leverage and urged governments to put public debt on a sustainable path.

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