AI debt surge adds duration risk as US Treasury doubles long-dated buybacks
This digest was compiled by AI from multiple sources — links to the originals are below.
US corporate bond issuance totals $1.68 trillion through mid-August, up 27% from a year earlier, with AI and Big Tech borrowing doubling to $220 billion. The US Treasury doubles liquidity-support buybacks for 10- to 30-year debt, and 30-year yields fall back from 5.34%, the highest since 2007, to about 5.19%. Bitcoin, gold and long-dated Treasuries rally after the Aug. 19 announcement.
Key Facts
- US corporate bond issuance totaled $1.68 trillion from January through mid-August, up nearly 27% from the same period last year, according to SIFMA.
- AI and Big Tech borrowing reached $220 billion in 2026, double last year's total, LSEG data showed.
- The US Treasury raised the maximum size of its liquidity-support operations for 10- to 20-year and 20- to 30-year securities from $2 billion to at least $4 billion per operation, starting Sept. 9.
- The 30-year Treasury yield dropped below 5.20% from a peak of 5.34%, its highest since 2007.
- Crypto liquidations exceeded $1.2 billion within one hour, with Bitcoin and Ethereum accounting for most of the losses.
AI-Fueled Corporate Issuance
US corporate bond issuance reached $1.68 trillion from January through mid-August, a 27% increase from the same period in 2025, according to SIFMA. The high technology sector accounted for 12.8% of 2026 issuance, while financials led with a 45.2% share. AI and Big Tech borrowers issued more than $220 billion in 2026, double last year's total, LSEG data showed. A Dallas Fed working paper concluded borrowing to finance AI data centers will add significant duration risk to the rates market. Ben Chabot, associate professor at Northwestern University and former Fed policy advisor, said increased corporate duration issuance pushes the Treasury term premium higher.
Treasury Buyback Expansion
The US Treasury raised the maximum size of its liquidity-support operations for 10- to 20-year and 20- to 30-year securities from $2 billion to at least $4 billion per operation. The increase takes effect Sept. 9 and runs through Nov. 4, according to the Treasury Department. The Treasury said it is increasing, by at least double, the size of operations for securities from the 10-year to the 30-year sector, just two weeks after releasing its planned quarterly schedule. Treasury Secretary Scott Bessent has repeatedly cited 10-year yields as his key financial-market benchmark. The 30-year Treasury yield fell to 5.185%, pulling back from the highest level since 2007.
Market Relief Rally
Bitcoin surged above $69,500 and Ethereum rose above $2,000 after the Treasury announcement, with Ethereum breaking above $2,000 for the first time since June. The 10-year Treasury yield dropped to 4.647% and the gap between 2- and 30-year yields narrowed sharply. CoinGlass data showed more than $1.2 billion in crypto positions were liquidated within one hour, with short sellers losing about $1.29 billion. Gold climbed to $4,465 an ounce and gram gold in Turkey reached 6,881 lira, the highest for gram gold in three months and for ounce gold since June 5.
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AI debt surge adds duration risk as US Treasury doubles long-dated buybacks
