The Bank for International Settlements identifies an artificial intelligence bust, inflation, and fiscal stress as the three most alarming threats to global prosperity. Resilience in the global economy is increasingly strained, with underlying financial vulnerabilities amplifying potential shocks. A disappointment in AI returns could trigger a pullback in financing, turning a capital expenditure boom into an investment bust. This could have larger macroeconomic consequences than in the past, potentially disrupting credit markets similarly to the 2008 financial crisis.Vulnerabilities linked to AI funding include complex "circular financing" deals with poorly disclosed terms and the risk of the same asset being pledged multiple times. The potential return of inflation is a concern, especially with ongoing energy supply disruptions and lingering impacts. Recent US data shows prices rising rapidly, and euro-zone inflation is expected to remain above the 2% target. High sovereign debts pose fiscal dangers, exacerbated by hedge funds using leveraged strategies that rely on short-term financing.These strategies create risks of fire sales and deleveraging feedback loops, allowing financial stresses to propagate quickly across markets, borders, and institutions. The BIS advises a strict focus on monetary discipline to prevent inflation expectations from becoming unhinged. They emphasize that disciplined fiscal policy, robust regulation, and credible monetary policy are essential to reinforce each other for stability.