With financial markets seemingly ignoring brewing geopolitical storm clouds, the International Monetary Fund (IMF) has sounded a clarion call for vigilance. This latest report paints a picture of a market caught in a dangerous dance between complacency and catastrophe, with investors either oblivious or blissfully ignorant of the escalating military conflicts and electoral uncertainty. While near-term global financial risks appear manageable, easing of monetary policy could be inflating asset bubbles, setting the stage for a potentially dramatic market correction.

This, combined with the heightened geopolitical uncertainty and unusually low market volatility, has created a tinderbox that could ignite with the slightest spark. Adding to the precarious economic balance is the IMF’s prediction that global public debt will exceed $100 trillion by the end of this year. For investors, in a world where the only certainty is uncertainty, complacency could be the financial markets’ greatest enemy.