Now Reading: AI Bond Borrowing Pushes Real Yields to Multi-Year Highs
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AI Bond Borrowing Pushes Real Yields to Multi-Year Highs
Inflation-adjusted borrowing costs have reached their highest levels in more than a decade across major economies, as AI companies and governments sell more bonds. US 30-year real yields are near an 18-year…
The Story in Brief
Inflation-adjusted borrowing costs have reached their highest levels in more than a decade across major economies, as AI companies and governments sell more bonds. US 30-year real yields are near an 18-year high of about 3%, while British and German 10-year real yields are also at decade highs. Alphabet, Amazon and Meta have issued nearly $220 billion in bonds this year, more than twice the $108 billion raised in all of 2025, LSEG data shows.
Heavy government borrowing, expectations of higher interest rates and reduced central-bank bond purchases are also lifting yields. Higher real yields can make shares less attractive and raise borrowing costs for companies and households. Neuberger’s Ashok Bhatia said US yields were below the 3% to 4% range where growth could face pressure, but called current levels a warning sign.
The Indian Opinion
The easy story is that AI alone is driving a bond-market threat. That overstates the evidence. Government deficits, defence and infrastructure spending, stronger US growth and the end of central-bank bond buying are also raising yields. The opposite claim, that record share prices make the risk irrelevant, is equally careless. The key test is whether US real yields move into the 3% to 4% range and then weaken company investment or household spending.
Source: thehindubusinessline.com
This story was synthesised by AI from the source linked above.
