Global Financial Fragilities Mount Despite Rate Cuts and Buoyant Markets

October 22, 2024-- Increased investor risk-taking could fuel vulnerabilities
When it comes to financial stability, the world is facing a split screen of short-term and medium-term factors. The good news is that near-term financial stability risks remain contained.
Why? Because the likelihood of a soft landing for the global economy has significantly increased.

As inflation continues to decline, major central banks have started cutting interest rates. This is boosting already buoyant asset prices and keeping financial market volatility subdued.

At the same time, our latest Global Financial Stability Report calls on policymakers to remain vigilant about the medium-term prospects. We want to highlight two areas of concern.

IMF World Economic Outlook -Global Economy in Flux, Prospects Remain Dim October 2025

October 14, 2025-- While the near-term forecast is revised up modestly, global growth remains subdued, as the newly introduced policies slowly come into focus
The global economy is adjusting to a landscape reshaped by new policy measures. Some extremes of higher tariffs were tempered, thanks to subsequent deals and resets. But the overall environment remains volatile, and temporary factors that supported activity in the first half of 2025-such as front-loading are fading.