Wall Street Shifts to AI Bonds as U.S. Treasury Yields Rise

Wall Street investment institutions are shifting their capital from U.S. Treasury bonds to AI corporate bonds, driven by higher issuance rates and perceived stronger debt repayment capacity of AI enterprises.

Zhang Gang, a multi-strategy hedge fund manager overseeing over $300 million in assets, revealed that he sold off $6 million worth of 10-year U.S. Treasury bonds in August and invested in AMD's newly issued 10-year senior unsecured bonds with an annualized interest rate of 5.5%.

The director of asset allocation at a large Wall Street asset management institution reported that the proportion of AI corporate bonds in their investment portfolio has risen to 30%, while U.S. Treasury bonds have dropped to 50%.

Alberto Musalem, President of the Federal Reserve Bank of St. Louis, acknowledged a 'competition for capital' between AI corporate bonds and U.S. Treasury bonds, while Vivek Paul at BlackRock Investment Group noted the accelerated pace of this competition.

Zhang Gang warned that if the trend continues, it will be difficult to arouse subscription interest from Wall Street if issuance rates remain below 6% for AI enterprises and 4.7% for U.S. Treasury bonds.