Central banks warn AI‑driven market risks as safe‑haven assets lose appeal

Investors are pulling back from traditional safe‑haven assets – US Treasury bonds, Japanese yen and gold – as rising inflation expectations, high real rates, widening fiscal deficits and a protracted US‑Iran conflict lift oil prices and diminish the attractiveness of fixed‑income returns. Analysts note that capital is instead flowing into AI‑focused equities such as Nvidia, Intel, Samsung, SK Hynix and TSMC, driving fresh market highs.

The Bank for International Settlements, representing 63 central banks, warned that the surge in AI investment creates opaque, “circular” financing structures and leverages that could trigger sharp equity corrections and spill over into corporate credit markets. The report highlighted supervision challenges, algorithmic price manipulation and cyber‑security threats, urging regulators to build safeguards against a potential liquidity freeze reminiscent of 2008 or the 2020 pandemic shock.