How Big Tech’s Bond Spree and Rising US Debt Are Creating Risks and Opportunities
#USdebt #BigTechAIdebt #AI Investing
Plus, a look at the biggest AI bond deals.
Is a global debt emergency on the horizon?
Big Tech’s bond-issuing spree is helping to pay for its massive artificial intelligence buildout. And it’s not expected to slow down this year. Meanwhile, the US federal deficit has swelled to about $39 trillion, according to the US Treasury Department. That’s raising red flags about the potential impact on the Treasuries market. Government and corporate debt are growing but for different reasons. How should investors think about it?
Dominic Pappalardo is the chief multi-asset strategist for Morningstar Wealth. It’s part of registered investment advisor, Morningstar Investment Management.
Why Bonds Still Have Long-Term Appeal Despite Recent Wobbles
https://www.morningstar.com/bonds/why-bonds-still-have-long-term-appeal-despite-their-recent-wobbles
On this episode:
00:00:00 Welcome
00:01:02 Big Tech’s AI bond-issuing spree explained
00:03:24 What’s driving the US federal deficit higher
00:05:38 Calls to prepare for a bond market emergency
00:06:39 Government vs. corporate debt key differences
00:07:46 Potential risks lurking in today’s bond market
00:09:34 Bond portfolio opportunities and investor takeaways
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This episode is sponsored by Vanguard: https://advisors.vanguard.com/engagement/fixed-income
