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Fortune••business
Key Points:
- Wall Street projects up to $2.25 trillion in investment grade debt issuance this year, driven by AI-related companies and hyperscalers funding large infrastructure projects.
- The surge in bond issuance raises concerns about who will buy the debt, with potential impacts on Treasury yields and mortgage spreads depending on whether buyers are government or private investors.
- U.S. federal debt exceeds $38 trillion, with $601 billion borrowed in the first quarter of fiscal 2026; factors such as potential tariff removals, increased tax refunds, and planned defense spending hikes threaten to widen deficits further.
- Despite recent Federal Reserve rate cuts, Treasury yields remain high, indicating persistent debt-servicing costs and the risk of rising rates and credit spreads throughout 2026.
