U.S. Fed's Waller On AI Investment Boom, Rising Debt, Inflation Risks And Global Bond Yields

Is the global AI investment boom pushing borrowing costs higher and creating new risks for inflation and debt markets? Federal Reserve Governor Christopher Waller, speaking with Bloomberg's Saleha Mohsin at the Bloomberg New Economy Forum, explained how massive investments in artificial intelligence are reshaping global capital flows and influencing bond yields. Waller highlighted how companies financing AI infrastructure through corporate debt are competing for capital, potentially pushing borrowing costs higher across economies. He also warned about growing fiscal pressures and research suggesting US Treasuries may be losing their traditional safety premium, potentially adding 50 to 70 basis points to yields. While Waller believes higher yields driven by productivity and economic growth can be positive, he cautioned that inflation fears and mounting government debt could create more serious challenges. Watch the discussion to understand the connection between AI spending, global debt, inflation expectations and the future of interest rates.