Bond Market Signals Rising Borrowing Costs for U.S. Companies
· Business · Fortune, The Independent
The bond market is signaling that the era of cheap money is over, with borrowing costs rising for U.S. companies. U.S. Treasury Secretary Scott Bessent attempted to calm bond markets with a $4 billion buyback plan for longer-dated government debt, but it managed to hold off a sell-off for barely a day. The national debt has topped $40 trillion, pushing up yields on the 30-year Treasury and increasing pressure on the Federal Reserve to raise interest rates at its September meeting. Washington is now paying close to $3.2 billion a day in interest on the debt, which in turn drives up mortgage rates for consumers and builders. Meanwhile, major technology companies including Alphabet, Amazon, Meta, Microsoft, and Oracle are issuing record amounts of debt to fund AI infrastructure, reaching about $500 billion so far this year.
Why it matters
Rising borrowing costs directly increase financial pressure on U.S. corporations, consumers, and federal debt servicing, while high-spending tech giants continue to issue record debt for artificial intelligence infrastructure.
Read the original report — Fortune
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