George Noble
Investment Writer, Former Fund Manager at Fidelity, Former Assistant to Peter Lynch
AI borrowing is pushing rates up because hyperscalers will pay any price for money, so rates must keep rising until they hurt price-sensitive borrowers. Amazon, Alphabet, Meta and Oracle sold about $194 billion of bonds by early July, 79% more than in all of 2025, and the 10-year yield touched 5.33%, the highest since 2002. Julien Garran warns a downturn may not lower long yields much, with big deficits everywhere while Japan and China step back from Treasuries. x.comÂ
US Treasuries remain a short because policy isn't restrictive and Bessent's bond rescue has already failed. Per @MikeZaccardi, nominal GDP growth of 6.6% is the highest since 2005 outside the COVID rebound, and 10-year yields have typically tracked it. Bessent doubled long-bond buybacks on Aug. 19 with the 10-year near 4.6%; it is now pushing 5%, the highest since 2023, even after bigger buybacks began Sept. 9. The bond market always wins, and rates go higher from here. x.com x.comÂ
Long-dated Treasury yields need to stay high because megacap tech companies now compete for bond buyers. Oracle bonds yield over 8%, Meta's over 7%, and Google sold a 10x-oversubscribed 100-year sterling bond above 6%, while hyperscaler issuance is surging from $35B toward $200B. Megacaps are becoming as creditworthy as governments, making this a new paradigm of persistent competition, and Warsh appears to agree hyperscaler debt plays a role. x.com x.com x.com x.com x.com x.com x.com x.comÂ
Long-dated Treasuries remain under pressure from historic AI borrowing and hot price gauges, even as the long end eases from 2002 highs. The AI sector has raised about $500 billion of debt in nine months, a quarter of all corporate issuance, and Goldman Sachs sees $1.2 trillion in 2027. Monday's ISM services prices-paid gauge hit its highest in over four years, and a December Fed hike is still largely priced. The 10-year back above 5.35% would end the relief; Brent under $97 would extend it. … Show more
Long-dated Treasuries could benefit from less issuance of AI-related debt, which today's news may point to, even if the deal itself is minor. Separately, a free Meta Muse hurts the leading AI models at least at the fringe, and wide consumer adoption of AI agents will come when Apple launches its own or partners with a model maker. x.comÂ
Long-dated US Treasuries face pressure because the market will buy US debt only at 5%-plus yields, with no short-term fix in sight. The 10-year yield keeps climbing parabolically as Washington issues enormous debt to fund deficits, investors demand more compensation for inflation and duration risk, the Fed is now raising rates, and Treasuries must compete harder for global capital. The government seems reluctant to act, while rising oil prices add to inflation pressure. x.comÂ
Inflation has broken long-dated US Treasuries' safe-haven role. Long-term Treasuries have returned -4.1% annually in the 2020s to date, versus +4.9% in the 1930s. Long bonds look unlikely to do well for at least the rest of this decade. x.com x.com x.com x.comÂ
Long-dated US Treasuries benefit from falling long-end yields as the Fed's inflation response becomes a policy error. The Fed looks likely to hike again to defend its credibility despite a supply shock; 5% rates are unsustainable, and current price action points to financial damage followed by a hard pivot. A one-year rate freeze could instead let long yields rise by giving the economy a breather and making later hikes more likely. x.com x.com x.com x.comÂ
Easing credit fears should make debt cheaper for neoclouds and other capital-heavy AI builders, allowing some of the hardest-hit infrastructure stocks to explode higher. Five-year CDS for CoreWeave, Oracle, Meta, Amazon and Nvidia peaked on October 26 and has since eased. Anthropic's S-1, AI infrastructure earnings and Oracle's investor day gave the debt market evidence of demand and returns. The risks should fade quickly so long as revenue and pricing power keep showing up. x.comÂ
Long-dated government bond yields are surging worldwide at once, a sign something is wrong. UK 30-year yields hit 5.88%, the highest since 1998, the US 30-year topped 5%, Japan's 10-year reached 2.95%, and German and French long yields hit 2011 and 2008 highs. The roots are dangerous government debt levels, European and UK central bank balance-sheet shrinkage, and tech giants issuing 20-40-year bonds that draw pension and insurer demand away from government debt. x.comÂ
Long-dated Treasuries are attractive at about a 5.2% yield, which looks like what it takes to draw domestic buyers to replace foreign demand. @acemoney21 argues the supply-demand imbalance is real as China and the EU leave Treasury auctions, so Americans must be incentivized with 5% risk-free yields, and that curve steepening is part of the administration's plan. Locking in about 5% on part of a portfolio for the next 20 years is appealing. x.com x.comÂ
Long-dated US Treasuries look unattractive when AI credit pays twice as much and the market assumes the Fed will bail it out if it breaks. Borrowers who don't care what money costs are setting the price for everyone else, so homebuyers pay through higher mortgage rates and small businesses through layoffs. JPMorgan is marketing a $5B Volta AI loan at roughly 11%, per a news post. The Fed has repeatedly protected big banks and is unlikely to let capitalism play out when banks face pain. x.com … Show more
