US stock markets which have rallied during the AI boom are at risk of a “sudden, sharp correction” while government bond markets are under mounting pressure, the International Monetary Fund has warned.
In its Global Financial Stability Report, published as policymakers gather in Washington for the IMF’s annual meetings, the Fund said that markets appear “complacent”.
It highlighted “increasing vulnerabilities in the financial system,” including in stock and bond markets, and among “non-bank financial intermediaries” (NBFIs) or “shadow banks”, which it warned are now closely bound to the banking sector.
US stock markets have repeatedly roared to record highs in recent months. The IMF said stocks do not appear as overvalued as they did during the dotcom bubble at the turn of the millennium. But it said the gains are worryingly concentrated among the “magnificent seven” tech firms, which include Apple, Nvidia and…
