Financial and commodity markets have been impacted by high inflation and a deteriorating growth outlook. The necessary tightening of monetary policy has cascaded through markets, contributing to rising yields, significant asset price corrections, and rising debt costs for sovereigns, households and corporates. Existing high debt levels in these sectors raise concerns about the prospects of debt servicing. In some emerging markets, tightening financial conditions combined with weak fundamentals and large outflows could accelerate debt distress. The growing potential for broad-based credit losses could affect the resilience of various financial intermediaries, with negative impacts on credit intermediation and economic growth going forward.