US tariffs have increased financial stability risks: IMF

Washington: Donald Trump s stop start tariff rollout has significantly increased global financial stability risks, the International Monetary Fund s...

Washington: Donald Trump's stop-start tariff rollout has "significantly" increased global financial stability risks, the International Monetary Fund said in a new report published Tuesday.

The IMF's Global Financial Stability Report (GFSR) was published as global financial leaders gather for meetings in Washington under the cloud of policy uncertainty triggered by Trump's tariff announcements.

The administration's tariff plans "triggered a bout of policy uncertainty," which was only exacerbated by the retaliatory measures unveiled by China, the IMF said.

Against this backdrop, the GFSR's authors found that "global financial stability risks have increased significantly, driven by tighter global financial conditions and heightened economic uncertainty."

The Fund identified three vulnerabilities to financial stability: High valuations in "key" equity and corporate debt markets; highly-leveraged financial institutions including some hedge funds; and the possibility of "further turbulence" in sovereign bond markets in countries with high debt levels.