The International Monetary Fund cautioned that complacency in markets may precipitate a sharp, disorderly correction driven by overvalued equity and credit assets, elevated deficits, and fragile nonbank financial systems. It flagged that AI-led exuberance masks underlying vulnerabilities, especially through nonbank exposures and sovereign bonds. The IMF urged central banks to be cautious about aggressive easing and called for regulatory strengthening, including for crypto markets, to prevent contagion within global financial systems.