US Market: Rising R-star adds to pressure on US Treasury yields as AI investment, borrowing lift demand for capital
· economictimes.indiatimes.com
US Treasury yields are rising partly on expectations that R-star, the economys neutral interest rate, may be structurally higher. Heavy government borrowing and AI investment are boosting capital demand, potentially keeping rates elevated longer. A higher R-star could limit Federal Reserve rate cuts, pressure Treasury prices and increase borrowing costs across the economy.
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