Convera sees AI spending pushing up long-term borrowing costs in 2027
TLT•Convera forecasts higher long-term funding and hedging costs in 2027 as AI investment increases demand for capital. Its analysis says competition with government borrowing could raise the term premium.
1. Borrowing cost outlook
Convera forecasts higher long-term funding and hedging costs in 2027 as AI investment increases capital demand. The analysis says competition with government borrowing could raise the term premium, while US federal debt exceeds $40 trillion and 10-year yields recently approached 5%.
2. Currency and AI investment
The analysis says yield differentials outweigh AI exports in driving exchange rates, leaving strong hardware exporters exposed to currency weakness.
