Bitrue analysis flags risk of persistently high US borrowing costs
TLT•BlackRock CEO Larry Fink warned that US long-term borrowing costs could remain elevated despite Federal Reserve rate cuts, citing about $40 trillion in federal deficits and financing needs for AI infrastructure. A one-gigawatt data center could cost about $50 billion, with around 40% allocated to GPUs and chips.
1. Long-term borrowing costs
Larry Fink warned that US long-term borrowing costs could remain elevated even if the Federal Reserve cuts short-term rates, as competition for capital intensifies. Reports surrounding BlackRock's third-quarter 2026 results cited his concerns about approximately $40 trillion in federal deficits and financing demands for AI infrastructure. Reported estimates put the cost of a one-gigawatt data center at about $50 billion, with around 40% allocated to GPUs and chips.
2. Potential market effects
Persistent inflation concerns, Treasury issuance and investor demand could keep the 10-year Treasury yield elevated. Higher yields could pressure growth stocks, raise corporate refinancing costs and curb cryptocurrency demand, while offering better income opportunities for new bond investors.
