BISness Media briefing on the BIS Quarterly Review, September 2025
Sep 15, 2025
Listeners dive into the unexpected optimism in global financial markets, despite ongoing trade conflicts. The discussion highlights rising corporate bond risks and the evolving role of retail investors in a landscape dominated by AI. As the dollar weakens, central banks face tough decisions balancing inflation and growth. Key insights into stock and bond interplay reveal early warning signs of financial distress. It's a captivating exploration of market resilience amidst uncertainties and the complex dance between monetary policy and investor sentiment.
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Episode notes
Buoyant Markets Mask Real Risks
- Global markets stayed buoyant despite tariff and policy uncertainty, driven partly by positive earnings and macro fundamentals.
- BIS flags fiscal outlook and trade conflicts as real risks that could reverse this sanguine mood.
Risk-On Rally Fueled By Tech And Easing Conditions
- Equity and credit markets rallied, led by large-cap tech and AI enthusiasm, while implied volatility fell.
- Credit spreads compressed to multi-decade lows even as defaults ticked up, signalling elevated risk appetite.
Ultra-Long Yields Signal Fiscal Worries
- Steepening at the ultra-long end of government yield curves reflects fiscal concerns and weaker investor demand.
- Highly leveraged non-bank investors have absorbed much government issuance, raising amplification risk in stress events.