IMF warns of rising uncertainty impacting global financial stability

Volatility in financial markets increased after the US tariff decisions, and the geopolitical and economic uncertainties caused serious volatility in global markets and sharply increased financial stability risks, the IMF said in its report released on Tuesday.

The IMF issued the “Enhancing Resilience amid Uncertainty” edition of the Global Financial Stability Report in April 2025.

The report stressed that risk assets have been sharply repriced since February following a series of tariff announcements by the US, and this accelerated after the announcement of higher-than-expected tariff plans on April 2.

Emphasizing that financial market volatility in stock, foreign exchange, and bond markets has increased significantly, the report stated that the reaction of other countries has further increased the uncertainty.

In the face of such high asset price volatility, the report stated that global financial stability risks have increased significantly, particularly as financial conditions tightened, as have macro-financial downside risks to growth.

Despite the recent turmoil in the markets, valuations in some key segments of the equity and corporate bond markets remained elevated, the report said, pointing out that this meant that readjustments in valuations could go further if the outlook worsened.

The report noted that policy uncertainty remains high and some macroeconomic indicators have surprised to the downside, increasing the likelihood of a correction in asset prices.