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The International Monetary Fund<\/a> (IMF) released its October Global Financial Stability Report on Tuesday, which outlines three major threats to global economies: an AI market correction, spiking government bond yields and cyberattacks.<\/p>\n Although global economies have proven mostly resilient so far, the IMF\u2019s directors are urging policy makers and business leaders to take immediate action to mitigate the risk from these potential \u201cshocks.\u201d<\/p>\n \u201cDirectors broadly concurred that risks to the outlook remain skewed to the downside,\u201d the report said.<\/p>\n \u201cIn a shock prone world, the capacity to deliver targeted support is crucial, and [directors] called for strengthening delivery mechanisms that can be scaled rapidly when shocks hit.\u201d<\/p>\n \n\t\t\t\t<\/p>\n Rising bond yields<\/a> have been a warning sign for financial markets in recent months amid the Iran war\u2019s risk to global economies, and the IMF says those risks are becoming more of a concern.<\/p>\n Story continues below advertisement<\/p>\n<\/p><\/div>\n Bonds are essentially loans, where governments or companies look to borrow money from the general public, and those bond purchasers expect a return or interest on that borrowed money, which is known as the yield on those bonds.<\/p>\n Those yields fluctuate regularly, based on various economic factors as well as supply and demand for those bonds, and yields have been spiking in recent months amid economic uncertainty and geopolitical conflicts, rising inflation<\/a> and government debt, and expectations of higher interest rates<\/a>.<\/p>\n The yield on the 10-year U.S. government treasury was at 5.22 per cent as of publication, down from a peak of more than 5.3 per cent last week and up from 4.24 per cent six months ago.<\/p>\n Get daily Canada news delivered to your inbox so you’ll never miss the day’s top stories.<\/p>\n<\/p><\/div>\n<\/p><\/div>\n The IMF said bond market risks have worsened since its April report, as higher energy prices have driven government bond yields up.<\/p>\n \u201cResurgent inflation or fiscal concerns could trigger a sharp rise in sovereign bond yields and spark broader market turmoil given the foundational importance of sovereign bonds. High public debt and rollover risks remain unresolved, increasing the chances that a rise in yields could occur in a disorderly manner,\u201d the report said.<\/p>\n \u201cThese developments suggest that bond market risks have worsened since the April 2026 Global Financial Stability Report. A crystallization of these fragilities could lead to market turmoil.\u201d<\/p>\n Story continues below advertisement<\/p>\n<\/p><\/div>\n \n\t\t\t\t\t\tRelated Videos<\/span>\n\t\t\t\t\t<\/p>\n![\"\"](\"https:\/\/d21y75miwcfqoq.cloudfront.net\/70c8fc80\")
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