The bond market is telling us the free lunch is over
The era of low borrowing costs and easy government spending is ending, as indicated by the global bond market. Rising inflation, significant government debt, and the substantial capital demands of AI development are collectively driving up interest rates and increasing market volatility. This shift means higher costs for consumers and businesses, and presents policymakers with more difficult trade-offs when attempting to manage economic downturns. AI
IMPACT Accelerates demand for capital, potentially increasing borrowing costs for AI infrastructure and impacting investment strategies.