Sinolink Securities: AI capital expenditure crowds out sovereign debt; rising long-end U.S. Treasury yields may compel the Federal Reserve to ease policy - 富途牛牛
Sinolink Securities: AI capital expenditure crowds out sovereign debt; rising long-end U.S. Treasury yields may compel the Federal Reserve to ease policy - 富途牛牛
Source: 富途牛牛
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DW NOTE
Sinolink argues the Fed will be forced to cut because AI capex is driving long yields higher by crowding out sovereign buyers. That assumes the Fed still answers to the bond market. It doesn't — it answers to inflation, which remains well above target, and to a fiscal deficit running at 6% of GDP. Long yields are rising because the market is pricing the reality that Treasury issuance has no natural buyer at these levels. Calling that a reason to ease is calling insolvency a reason to borrow more.