IMF Warns of Rising Global Financial Stability Risks from AI, Debt, and Spiking Yields, While Upgrading 2026 Growth Forecast

The International Monetary Fund (IMF) has cautioned against complacency in global financial markets, highlighting risks from a potential artificial intelligence-driven selloff, rising government bond yields, and cyberattacks. Despite these warnings, the IMF slightly upgraded its global economic growth forecast for 2026 to 3.1% (from 3.0% in July), attributing it partly to strong AI investment. However, it projects global headline consumer price inflation at 4.7% in 2026, higher than previous forecasts, and warned that elevated public debt levels, particularly in advanced economies, increase the risk of sharply higher borrowing costs. The IMF also noted that hedge funds' gross assets under management have tripled to $13 trillion since 2013, with positions concentrated in AI-linked sectors, posing risks in periods of stress.