Bond yields have skyrocketed to multi-decade highs recently, intensifying the selloff in India’s stock market and wiping out massive sums of investor wealth. Adding to the worries, the International Monetary Fund (IMF) has warned that surging AI-related borrowing costs, among other factors, can lead to further downturns in global markets.
In its October Global Financial Stability Report, the IMF said global markets now face three key risks ahead, each of which has the potential for broader implications. These are artificial intelligence-driven market correction, a sharper rise in sovereign bond yields, and cyberattacks.
