‘Boring’ trumps disorder and volatility
CORRECTION / (L-R) IMF Communications Officer Jose Luis De Haro, IMF Chief Economist Silvana Tenreyro, IMF Research Department Deputy Director Petya Koeva Brooks and IMF Research Department Division Chief Deniz Igan attend the World Economic Outlook press briefing at the Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG) at the Queen Sirikit National Convention Center (QSNCC) in Bangkok on October 13, 2026.
Lillian Suwanrumpha | Afp | Getty Images
Hello, this is Hui Jie writing to you from Singapore. Welcome to another edition of CNBC’s Daily Open.
Many modern investors lack enthusiasm for “boring” — but “boring” is perhaps preferable to a disorderly market environment.
The International Monetary Fund warned Tuesday that mounting debt and inflation could trigger a “disorderly” spike in sovereign bond yields.
The global economy, meanwhile, is proving more resilient than expected as the AI investment boom offsets some of the energy shock from the Middle East conflict. The IMF, however, says this resilience is approaching its limits.
In this context, DBS Bank CEO Tan Su Shan’s assessment of Singapore as a predictable market where — “boring is not bad” — sounds rather timely.
What you need to know today
Some warning lights are flashing on the global economy dashboard.
The IMF warned Tuesday that government bond yields could rise in a disorderly fashion, as rising inflation, mounting debt and AI-related borrowings pressure sovereign bond markets.
Government bond yields in several advanced economies have climbed to multidecade highs, driven by higher energy costs due to the Middle East conflict and expectations for tighter monetary conditions as central banks look to curb resurgent inflation.
In its latest Global Financial Stability Report, the fund warned that conditions could deteriorate, flagging the potential for “a sharp rise in sovereign bond yields.”
The IMF warned last week that global public debt had reached near its highest level since World War II and was on track to soon exceed 100% of GDP.
A sharp rise in yields would mark down asset values through higher discount rates, including for AI-related assets, and erode the value of government bonds posted as collateral.
It’s not just the bond market. Silvana Tenreyro, economic counsellor and director at the IMF research department, warned that “the global economy has been resilient, but that resilience is reaching its limits.”
While the IMF sees a softer-than-anticipated slowdown in the global economy this year, partly thanks to the AI investment boom, it says this is also adding to inflationary pressures and financial fragility.
“This is a large, front-loaded demand shock” that sees massive investment pouring into sectors such as semiconductors, data centers, and power generation, before any broad productivity gains have materialized, it said in the report.
The IMF warned that in a scenario where AI productivity gains fail to materialize, U.S….
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