Risk to the global economy from financial markets are at a “worrisome juncture,” as rising inflation will make it difficult for central banks to cushion any sharp tightening of financial conditions, a senior International Monetary Fund official warned Tuesday.
“We are looking at a pretty uncertain time, we do detect a lot of uncertainty, a lot of downside risks. So it is a worrisome juncture,” Tobias Adrian, the director of the IMF’s monetary and capital markets department told MarketWatch in an interview.
Adrian spoke as the IMF released its latest report on global financial stability, which noted that investor optimism about the economic outlook is fading and financial market vulnerabilities are intensifying.
Some warning signs that point to a deterioration in the underlying foundations of financial stability are increased financial risk and rising fragilities in the nonbank financial…