IMF Warns AI Slowdown and Spiking Bond Yields Pose Systemic Risk to Global Markets

The International Monetary Fund warned on Tuesday that an artificial intelligence-driven selloff, rising government bond yields, or major cyberattacks could trigger systemic shocks across global financial markets. The IMF's latest Global Financial Stability Report highlighted that hyperscalers now account for 10% of global investment-grade bond issuance, a massive leap from less than 1% in 2024. The fund noted "growing evidence" that AI's potential economic gains may fall short of expectations, warning that excessive leverage in the sector could exacerbate a downturn through forced selling and extreme volatility. Cybersecurity vulnerabilities are also accelerating, with the IMF reporting that in over 70% of 2026 cases, software providers had almost zero time to patch flaws before they were actively exploited—a 20-point increase from the prior year. While stress tests showed most banks remain robust, institutions representing 22% of global banking assets demonstrated "weak" capital levels under hypothetical downturn scenarios, up from 18% in the 2025 test. "These risks by themselves do not necessarily threaten financial stability but could become systemic...if they are amplified by underlying vulnerabilities." — The International Monetary Fund.