US Bonds Rally as AI Concerns Spark Safe Haven Demand
US Treasury yields dropped sharply as investor anxiety over AI funding costs drove demand for safe assets. Markets repriced Federal Reserve rate expectations amid ongoing inflation pressures.
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United States 10-year yields fell 19 basis points overnight in the largest daily move since February 2023, while fed funds futures rallied up to 22 ticks. The sharp shift followed mounting investor concerns over the massive capital expenditure required for artificial intelligence compute infrastructure. Bond markets rallied as safe-haven demand surged, though stubbornly high oil prices complicate the monetary outlook.
