THE BOTTOM LINE
Bond yields may be finally baking in an AI world
Investment firms are reassessing the long-term macroeconomic impact of artificial intelligence
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ALTHOUGH some are puzzled by the coincidence of an artificial intelligence boom and rising borrowing costs, they are closely linked.
Beyond the immediate heat of the AI investment frenzy, a long-term productivity surge is lifting estimates of neutral interest rates even as workers’ share of the gross domestic product pie declines.
The Iran-related oil shock and its immediate inflation fallout explain some of this month’s bond market jitters. Record-high stock markets have been harder to explain during an energy crunch.
