AI debt boom: implications for Treasuries and corporate bonds
Corporate bond issuance by AI-related firms has surged over the past year, particularly at the long end of the curve. This could push up Treasury term premia before long if it continues at this rate, although it probably hasn’t done so by much so far. This surging issuance also means corporate bond indices, particularly those focused on long-dated debt, are increasingly vulnerable should the AI boom turn to bust.
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