Pimco: There is little evidence that AI-related debt issuance directly crowds out U.S. Treasuries.

Pimco said that, looking at nominal yields, term premiums, and swap spreads together, there is scant evidence that AI companies' larger-than-expected debt issuance is pushing up U.S. Treasury yields. Multi-asset credit strategist Lotfi Karoui wrote in a report that the AI capital expenditure boom may indeed raise the equilibrium real interest rate through the savings and investment channel, but the narrower view that AI debt issuance is having a direct crowding-out effect on U.S. Treasuries finds little support in the data.