AI Spending Is Helping Push Long-Term Rates Higher, Warsh Says

Massive cloud providers are spending big to build out the infrastructure needed to power artificial intelligence. Warsh said that spending is one reason long-term bond yields are so high. "The surge in capital expenditures, which I referenced in my remarks, is real, and the so-called hyperscalers are out of the market raising funding, and so the competition for capital is real, and I think it partly explains the increase in yields," Warsh said.