Fed chair Janet Yellen also cautioned investors in July on the "substantially stretched valuations" in certain market sectors.
Looking forward, the IMF said the recovery is projected to regain some strength in the remainder of 2014 and 2015, albeit at a weaker pace than originally foreseen in spring.
Fed, in monetary policy report, says valuations stretched
"The global outlook for 2014 is weaker than in the April WEO (World Economic Outlook), on account of the investment weakness observed at the global level in the first half of the year. Moreover, there are concerns that the sluggish recovery in the euro area may be stalling," the fund said.
In advanced economies, growth is generally expected to strengthen in 2014–2015, led by the U.S. Japan is the exception as the planned unwinding of fiscal stimulus is likely to leave growth broadly unchanged in this year and next.
Emerging markets are also on course for a moderate increase in growth in the second half of 2014 and 2015, but Latin America's outlook for economic growth has been revised down due to weakness in Brazil and Argentina.
—By CNBC's Jenny Cosgrave.