AI’s $5.5 Trillion Funding Boom Is Colliding With 5% Treasuries

The bond market is getting crowded

AI needs trillions in funding just as Treasury and corporate supply are already testing investor capacity. Credit spreads may be starting to reflect it.

Spreads are widening, but this does not look like a normal recession signal. Growth remains solid and earnings remain strong. JPM’s caution is instead focused on a 10-year Treasury yield near cycle highs, elevated issuance and higher bond volatility.