In a press briefing in Washington, DC, the Director of the IMF’s Monetary and Capital Markets Department Tobias Adrian said that a sense of optimism has pervaded financial markets in recent months, amid investor confidence that the fight against inflation is entering its “last mile” and that central banks will ease monetary policy in the coming months.
“Global financial stability has improved since we last met in October. The backdrop is a global baseline of a soft landing with inflation gradually returning to target.
Markets have been optimistic, with risky asset rallying and credit spreads compressing. Riskier borrowers have been able to issue debt and access other forms of capital market financing,” said Adrian.
There are likely to be bumps along this last mile, as the IMF shows in the latest Global Financial Stability Report. Geopolitical tensions could intensify and weigh on investor sentiments.
Strains in commercial real estate have become more acute, which could increase pressure on some lenders. China’s financial markets continued to be weighed down by…
