‘Stretched’ bond markets vulnerable to instability – IMF
Expectations of soft landing have compressed spreads and could lead to sudden repricing, report says
The International Monetary Fund warns optimism by investors may have left bond markets exposed to a sudden repricing if conditions change.
In its Global Financial Stability Report, published today (April 16), the fund says financial markets have “turned quite optimistic” since the October 2023 edition of the report. While that has helped mitigate the effect of central bank rate hikes on households and businesses, it has also led to “stretched” valuations in markets.
Tobias Adrian, the IMF’s
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