The simple case for how AI spending is pushing up Treasury rates via inflation
soumitrashukla9 · x · 2026-10-08
Responding to Derek Thompson's open question about whether AI is behind rising Treasury rates and inflation, Joe Weisenthal offers a deliberately simple framework: there's a lot of spending right now, a decent chunk of it AI-related; spending puts upward pressure on prices; the Fed keeps rates high to counteract that pressure; and Treasuries simply reflect Fed policy. No need to overcomplicate it — AI spending works through the standard spending→inflation→rates channel.
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