Global fund managers express record concern about corporate overinvestment, with 33% citing excess spending. Hyperscaler capital expenditure is projected to reach $800 billion in 2026 and exceed $1 trillion in 2027, driven by AI investment, while debt issuance has more than doubled year-over-year.
Treasury Secretary Scott Bessent signaled the White House respects the Federal Reserve's independence ahead of an anticipated rate hike this week, acknowledging that bond markets wield more power than military force in constraining government policy. The FOMC meeting comes as stronger-than-expected employment data and stubbornly high inflation may justify tightening, despite President Trump's preference for looser financial conditions. Wall Street analysts warn that if the Fed fails to act on inflation, bond markets could force rates higher by interpreting inaction as policy acceptance of higher inflation.