Tech debt squeezes sovereign bonds
7m
Major U.S. tech firms' surge in issuances in European credit markets to fund AI coincided with U.S. government yields rising to post‑crisis highs, crowding out sovereign bonds.
"Artificial Intelligence and Labor Markets: Evidence from Google Trends" has been published at the Journal of Economics and Finance: doi.org/10.1007/s12197-025-... Free working paper version is available at dx.doi.org/10.2139/ssrn.482...
September 18, 2026 at 10:30 PM
"Artificial Intelligence and Labor Markets: Evidence from Google Trends" has been published at the Journal of Economics and Finance: doi.org/10.1007/s12197-025-... Free working paper version is available at dx.doi.org/10.2139/ssrn.482...
The bond market has figured out that there's no plan to stop borrowing. This year's deficit is the largest postwar deficit outside a recession or war. Trump can say whatever he wants, but the markets are only looking at the bank statements. https://youtu.be/P-zk1Jk6ntQ
September 18, 2026 at 12:36 PM
The bond market has figured out that there's no plan to stop borrowing. This year's deficit is the largest postwar deficit outside a recession or war. Trump can say whatever he wants, but the markets are only looking at the bank statements. https://youtu.be/P-zk1Jk6ntQ
Banks' Balance Sheets Post-Pandemic Fueled by Higher Cash and Treasuries/Agencies Holdings #BankLending #econsky
September 18, 2026 at 8:57 PM
Banks' Balance Sheets Post-Pandemic Fueled by Higher Cash and Treasuries/Agencies Holdings #BankLending #econsky
Markets read into every word from the Fed like I used to read into every word in a note from my high-school crush. It felt like trillions of dollars were on the line. https://newsletter.platypuseconomics.com/p/the-feds-most-powerful-tool-is-expectations
The Fed’s Most Powerful Tool Is Expectations
Kevin Warsh is trying to set them.
newsletter.platypuseconomics.com
September 18, 2026 at 2:44 PM
Markets read into every word from the Fed like I used to read into every word in a note from my high-school crush. It felt like trillions of dollars were on the line. https://newsletter.platypuseconomics.com/p/the-feds-most-powerful-tool-is-expectations
While on yields, this chart from The Wall Street Journal on US mortgages.
#economy #markets #yields #mortgages @wsj.com
#economy #markets #yields #mortgages @wsj.com
September 18, 2026 at 6:15 PM
While on yields, this chart from The Wall Street Journal on US mortgages.
#economy #markets #yields #mortgages @wsj.com
#economy #markets #yields #mortgages @wsj.com
JUST PUBLISHED: "International Spillovers of Conventional versus Unconventional U.S. Monetary Policy" is available at International Finance doi.org/10.1111/infi.70022
Working paper version is available at dx.doi.org/10.2139/ssrn.542...
Working paper version is available at dx.doi.org/10.2139/ssrn.542...
September 18, 2026 at 1:30 PM
JUST PUBLISHED: "International Spillovers of Conventional versus Unconventional U.S. Monetary Policy" is available at International Finance doi.org/10.1111/infi.70022
Working paper version is available at dx.doi.org/10.2139/ssrn.542...
Working paper version is available at dx.doi.org/10.2139/ssrn.542...
Reposted by Christopher Wright
15/ The *scale* of the US investment in datacenters is staggering.
Other countries are having similar conversations about the effect of AI on economic development, electricity and land etc but hard to compete with US financial sector & technological dominance of AI firms @katemac.bsky.social
Other countries are having similar conversations about the effect of AI on economic development, electricity and land etc but hard to compete with US financial sector & technological dominance of AI firms @katemac.bsky.social
September 18, 2026 at 6:13 PM
15/ The *scale* of the US investment in datacenters is staggering.
Other countries are having similar conversations about the effect of AI on economic development, electricity and land etc but hard to compete with US financial sector & technological dominance of AI firms @katemac.bsky.social
Other countries are having similar conversations about the effect of AI on economic development, electricity and land etc but hard to compete with US financial sector & technological dominance of AI firms @katemac.bsky.social
Instead, the authorities will focus on local-level fiscal support, such as expanding local government special bond issuance for infrastructure projects in sectors including data centres and grid upgrading to arrest the decline in fixed-asset investment.
September 18, 2026 at 10:11 AM
Instead, the authorities will focus on local-level fiscal support, such as expanding local government special bond issuance for infrastructure projects in sectors including data centres and grid upgrading to arrest the decline in fixed-asset investment.
by Andrew Watt
I agree. But that also implies that, at a time of an AI boom, it is not wise to run large deficits.I fear this will not end well.
And structurally, I think government borrowing should be invested (in the widest sense) and not just recycled back to bondholders.
And structurally, I think government borrowing should be invested (in the widest sense) and not just recycled back to bondholders.
September 18, 2026 at 5:27 AM
I agree. But that also implies that, at a time of an AI boom, it is not wise to run large deficits.I fear this will not end well.
And structurally, I think government borrowing should be invested (in the widest sense) and not just recycled back to bondholders.
And structurally, I think government borrowing should be invested (in the widest sense) and not just recycled back to bondholders.
"Thresholds in the Finance-Growth Nexus: A Cross-Country Analysis" is available at the World Bank Economic Review: doi.org/10.1093/wber/lhr011
September 18, 2026 at 1:30 AM
"Thresholds in the Finance-Growth Nexus: A Cross-Country Analysis" is available at the World Bank Economic Review: doi.org/10.1093/wber/lhr011
Views for @financialtimes.com: #China’s move is mostly showing the #US they can dump #Treasuries. Global investors were becoming increasingly concerned about US debt levels, which passed $40tn last month.
www.ft.com/content/69f0...
www.ft.com/content/69f0...
China’s US Treasury holdings fall to lowest level since 2008
Gradual unwinding comes as rift deepens between world’s two largest economies
www.ft.com
September 18, 2026 at 2:55 AM
Views for @financialtimes.com: #China’s move is mostly showing the #US they can dump #Treasuries. Global investors were becoming increasingly concerned about US debt levels, which passed $40tn last month.
www.ft.com/content/69f0...
www.ft.com/content/69f0...
by Andrew Watt
Key is that r moves sluggishly bc of the big historical component. US (& EU countries) still benefit from low past interest rates. But that cuts both ways. Current high rates also get baked in. If g falls and so do current interest rates, the govt still has a problem bc r takes a long time to fall.
September 18, 2026 at 4:05 AM
Key is that r moves sluggishly bc of the big historical component. US (& EU countries) still benefit from low past interest rates. But that cuts both ways. Current high rates also get baked in. If g falls and so do current interest rates, the govt still has a problem bc r takes a long time to fall.
Caixin: "Traditional bank loans have fallen to less than 60% of China’s total credit supply for the first time in seven years, as plunging interest rates drive corporate and government borrowers into the bond market."
www.caixinglobal.com/2026-09-16/a...
www.caixinglobal.com/2026-09-16/a...
Analysis: Plunging Yields and Debt Swaps Are Rewiring China’s Credit Market
The shift reflects a prolonged low-interest-rate environment and Beijing’s sweeping local government debt-resolution plan, which are accelerating the transition toward direct financing
www.caixinglobal.com
September 18, 2026 at 7:39 AM
Caixin: "Traditional bank loans have fallen to less than 60% of China’s total credit supply for the first time in seven years, as plunging interest rates drive corporate and government borrowers into the bond market."
www.caixinglobal.com/2026-09-16/a...
www.caixinglobal.com/2026-09-16/a...
Rising Japanese government bond yields, meanwhile, were tempting Japanese investors back to the domestic market, which could push US Treasury yields up further.
September 18, 2026 at 2:55 AM
Rising Japanese government bond yields, meanwhile, were tempting Japanese investors back to the domestic market, which could push US Treasury yields up further.
by Andrew Watt
Important and indeed counterintuitive points.a large interest burden, apparently, helps with the debt maths.
Still I think this is too sanguine for the US. Historically r-g hasn't been sustained at -2.5 for extended periods.Average r is rising. g likely not (unless AI boom).
Still I think this is too sanguine for the US. Historically r-g hasn't been sustained at -2.5 for extended periods.Average r is rising. g likely not (unless AI boom).
September 18, 2026 at 3:57 AM
Important and indeed counterintuitive points.a large interest burden, apparently, helps with the debt maths.
Still I think this is too sanguine for the US. Historically r-g hasn't been sustained at -2.5 for extended periods.Average r is rising. g likely not (unless AI boom).
Still I think this is too sanguine for the US. Historically r-g hasn't been sustained at -2.5 for extended periods.Average r is rising. g likely not (unless AI boom).
Japan Raises Interest Rates to 31-Year High Under U.S. Pressure www.nytimes.com/2026/09/17/b...
Japan Raises Interest Rates to 31-Year High Under U.S. Pressure
The Bank of Japan’s widely expected move followed an unusual campaign by Treasury Secretary Scott Bessent for tighter monetary policy.
www.nytimes.com
September 18, 2026 at 5:54 AM
Japan Raises Interest Rates to 31-Year High Under U.S. Pressure www.nytimes.com/2026/09/17/b...
by John Spoehr
Raising the spectre of a powerful omnipotent technology catches the imagination of investors. Fear rather than hype is now the feedstock of the AI feeding frenzy. Beware major AI CEO’s offering to shape regulatory environments. AI legislation needed to mitigate AI harm and risk.
September 18, 2026 at 6:22 AM
Raising the spectre of a powerful omnipotent technology catches the imagination of investors. Fear rather than hype is now the feedstock of the AI feeding frenzy. Beware major AI CEO’s offering to shape regulatory environments. AI legislation needed to mitigate AI harm and risk.
Reposted by Simon Lester
Pres. Trump's proposed election dividend cheques would push up the deficit, push up inflation, push up interest rates, and make the US economy weaker. @jessicadickler.bsky.social at @cnbc.com summed up views from Brian Bethune, @byheatherlong.bsky.social, and myself. www.cnbc.com/2026/09/10/t...
Trump’s proposed $5,000 election dividend checks could fuel inflation, economists say
Economists say President Donald Trump’s promise of a $5,000 "dividend" check could stoke inflation, further straining household finances in the long run.
www.cnbc.com
September 18, 2026 at 12:57 PM
Pres. Trump's proposed election dividend cheques would push up the deficit, push up inflation, push up interest rates, and make the US economy weaker. @jessicadickler.bsky.social at @cnbc.com summed up views from Brian Bethune, @byheatherlong.bsky.social, and myself. www.cnbc.com/2026/09/10/t...
Reposted by John R. Hutchinson
The enornmity of the AI moment in markets in a few killer stats here in this column by Richard Waters on whether AI has broken the old VC model as.ft.com/r/95cda12f-f...
September 18, 2026 at 10:46 AM
The enornmity of the AI moment in markets in a few killer stats here in this column by Richard Waters on whether AI has broken the old VC model as.ft.com/r/95cda12f-f...