AI Spending Boom Could Keep Interest Rates Higher for Longer, Apollo Economist Says

By Public Technologies
  • AI spending could keep interest rates higher for longer by weakening monetary tightening’s impact, Apollo chief economist Torsten Sløk warned Thursday.
  • Many AI investors expect returns above 10%, compared with the approximately 4% Fed funds rate, supporting continued infrastructure spending.
  • The 10-year US Treasury note yield rose approximately 125 basis points over the past year, yet analysts raised 2027 capital expenditure expectations.
  • Persistent fiscal deficits and heavy Treasury issuance could raise the term premium, keeping long-term borrowing costs elevated despite potential oil-price relief.
  • Disappointing AI returns could trigger sharp reassessments of valuations and capital expenditure plans.


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