AI demand spikes Treasury yields
12m
U.S. Treasury yields rose to their highest since 2008 as AI-fueled private asset demand pulled capital from sovereign debt, triggered bond sales and reportedly prompted some governments to withdraw gold.
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
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
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
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
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.
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.
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...
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...
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...
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