AI building boom ripples through inflation-hit Treasury market
The artificial intelligence boom is significantly impacting long-term Treasury yields, which have risen to their highest levels since 2007. Major technology companies have raised substantial amounts of debt to finance AI-related infrastructure investments, contributing to this trend. While AI borrowing is not the sole factor influencing Treasury yields, it is shaping market dynamics alongside inflation and Federal Reserve policies.
- ▪Meta Platforms and Oracle have collectively raised US$250-billion in debt markets this year.
- ▪AI-related infrastructure investment has contributed to the rise in 30-year Treasury yields.
- ▪Oracle has become a major issuer of long-term debt, significantly impacting duration risk in the bond market.
Opening excerpt (first ~120 words) tap to expand
ShareSave for laterPlease log in to bookmark this story.Log InCreate Free AccountThe artificial-intelligence boom already has fuelled a record stock-market surge. Now it’s driving up long-term Treasury yields too.Meta Platforms META-Q, Oracle ORCL-N and other technology companies have raised US$250-billion in debt markets globally this year, according to Morgan Stanley, borrowing at a scale that would have been hard to imagine only a few years ago.The recent surge in AI-related infrastructure investment is partly behind the May rout that pushed 30-year Treasury yields to their highest level since 2007, analysts say, alongside inflation fears and shifting expectations for Federal Reserve policy.
…
Excerpt limited to ~120 words for fair-use compliance. The full article is at The Globe and Mail.
Discussion
0 commentsMore from The Globe and Mail
