Governments globally to turn to non-dollar bonds amid AI-driven liquidity crunch, Citi banker says - WTVB
Governments globally to turn to non-dollar bonds amid AI-driven liquidity crunch, Citi banker says - WTVB
Source: WTVB
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DW NOTE
A Citi banker floats the idea that governments will issue more non-dollar debt because AI capex is supposedly soaking up liquidity. This ignores that sovereign bond markets price risk, not technology trends. If a government can't place dollar debt, it's because investors don't trust the fiscal position — denominating the same liability in yen or euros doesn't make the underlying balance sheet less rotten. The real constraint isn't AI data centres crowding out Treasury buyers; it's that the US ran a $1.9 trillion deficit in fiscal 2026 while the 10-year yield climbed to 5.21%. Call that what it is: a repricing of default risk, not a liquidity problem with a currency solution.