The IMF reported that financial stability risks had escalated, with the global financial system under pressure from persistent inflation and geopolitical tensions, particularly due to Russia's ongoing invasion of Ukraine and the lasting effects of the COVID-19 pandemic. Although inflation had decreased thanks to central bank interventions and lower commodity prices, core inflation remained stubbornly high. The IMF projected global economic growth to slow from 3.4% in 2022 to 2.8% in 2023, with advanced economies experiencing a notable slowdown.

In the United States, the Federal Reserve's Beige Book indicated that overall economic activity was largely unchanged. Consumer spending was flat or slightly down, and the manufacturing sector showed flat or declining activity despite improving supply chains. Employment growth moderated, with some firms opting for natural attrition instead of new hiring.

In Europe, the economic outlook was similarly challenging. The Eurozone saw a slight reduction in headline inflation, though core inflation continued to rise. Business surveys indicated resilience, but high borrowing costs and political protests, particularly in France, added to the pressure. The European Central Bank continued to raise interest rates to combat inflation, implementing a 50 basis point hike in March and signaling further tightening ahead.

The banking sector faced considerable stress, particularly following the collapse of Silicon Valley Bank and the emergency takeover of Credit Suisse by UBS. These events triggered widespread government interventions and heightened fears of contagion across the financial system, underscoring vulnerabilities within both the banking sector and nonbank financial institutions. Central banks and regulators remained focused on enhancing financial stability and resilience in response to these challenges.