The Resilience Trap

Forces that held the world economy together are now its biggest fault line — reading the BIS's 2026 worry list

Markets spent the past year proving how much they could absorb. The steepest tariff hikes in decades, a war in the Middle East, the closure of the world’s most important oil chokepoint — and still equities near highs, credit spreads tight, growth broadly intact. The Bank for International Settlements has just published its read on why, and it is not the victory lap the price action implies.

The BIS annual report is the closest thing the central-banking world has to a collective worry list, and this year’s is pointed. The argument, stripped down: the very forces that delivered all that resilience — the AI capital boom, easy financial conditions, a sovereign-bond market that always seems to clear — have quietly become the system’s principal amplifiers. The airbags, in other words, are now part of the crash risk.

Three things sit at the centre of it. The AI build-out and the way it is being financed. A government bond market whose plumbing has changed beneath everyone. And an inflation backdrop in which supply shocks, not demand, now set the regime.

I’ve gone through all three chapters so you don’t have to, pulled out what actually matters for a macro book, and turned it into a hopefully easy-to-read summary post: where I think the risk is mispriced, how I’d express it, and the handful of signals I’m watching to know when the markets turn.

Let’s dig in.