Supportive monetary policy in developed economies is helping buoy the global economy after a weaker-than-expected first half, IMF staff wrote in a note to Group of 20 officials. At the same time, money keeps flowing into stocks and bonds even in markets where growth is weakening or the recovery isn’t clear, raising concerns that investors are underestimating credit risks, according to the report.

“Valuations in virtually all major asset classes are stretched relative to past norms,” IMF staff wrote. “Investor sentiment has remained positive despite mixed evidence on the strength of the recovery and geopolitical tensions.”

Policy makers from the Group of 20 nations meet this week in Cairns, Australia, to discuss ways of boosting global demand. The Fed Wednesday maintained a commitment to keep interest rates near zero for a “considerable time.” At the same time, Fed officials raised their median estimate for their policy interest rate at the end of 2015 to 1.375 percent, compared with the 1.125 percent estimate made in June.

The Washington-based lender said it expects the 2014 global expansion to be slower than the 3.6 percent it forecast in April. The IMF already cut its outlook to 3.4 percent in July.

“While the recovery is projected to regain some strength in the remainder of 2014 and 2015, it would be weaker than foreseen in the spring,” IMF staff wrote in the report.