JPMorgan questions whether AI bond binge is behind Treasury yield surge
TLT•JPMorgan analysts said heavy bond sales by tech companies funding AI may not explain rising Treasury yields: the 10-year yield rose 53 basis points in September, despite no bond sales by hyperscalers or data center companies. High-grade issuance reached $198 billion, while JPMorgan’s high-grade index lost 2.7%.
1. AI issuance questioned
JPMorgan analysts said heavy bond sales by tech companies funding artificial intelligence may not be the main reason U.S. Treasury yields are rising. They noted that the 10-year Treasury yield rose 53 basis points in September even though hyperscalers and data center companies issued no bonds that month.
2. Corporate bond figures
Net high-grade issuance was only slightly higher in September, while total high-grade issuance reached $198 billion, 34% above the four-year average for the month and $16 billion below a September record. A $30 billion media deal helped lift the total. Year-to-date supply stood at $1.695 trillion, up 30% from a year earlier.
3. Returns fall
JPMorgan’s JULI high-grade index lost 2.7% in September, its worst month since February 2023. Long-dated bonds fell 4.5%, and the index was down 3% for the year.
