Treasury Yield Surges to 22-Year High as AI Debt Costs Soar

The 30-year Treasury yield surged to its highest level since June 2004, reaching 5.489% on September 24.

This move is part of a broader selloff that has been building for weeks, with bond traders pricing in a Federal Reserve that will remain hawkish.

The repricing is affecting AI infrastructure debt, which accounts for a significant portion of corporate borrowing tied to data centers.

Hyperscalers have been relying heavily on debt markets, with Goldman Sachs estimating that about a third of AI capex will be debt financed this year.

However, the increasing yields and widening spreads are making it more expensive for companies to borrow money, which could impact their ability to fund AI infrastructure spending.