US Treasury and corporate debt issuance hit all-time highs at $7.7 trillion annually, with AI firms driving record bond sales amid government deficit spending, intensifying competition for capital and upward pressure on yields.
Macro & Markets ·
US Treasury issuance excluding Treasury bills has reached $5.06 trillion over the past 12 months, marking the highest level since 2021, while corporate debt issuance simultaneously climbed to a record $2.64 trillion over the same period. Combined, Treasury and corporate bond issuance totaled $7.70 trillion annually, an unprecedented level. This surge reflects concurrent pressures: the US government is managing historically elevated budget deficits while corporate America, particularly AI-focused firms, is financing one of the largest investment cycles in recent decades.
Bond issuance from AI-related companies has accelerated sharply, rising 541% year-over-year in 2025 to $109 billion, then increasing a further 78% in the first half of 2026 to $194 billion. This concentration of AI-sector borrowing underscores the capital intensity of the sector's expansion.
The simultaneous demand from both public and private borrowers for capital is intensifying competition in debt markets. Multiple forces are converging to push long-term yields higher: this capital competition, alongside inflation dynamics, Federal Reserve policy decisions, and economic growth expectations. How long this capital competition persists and whether it forces material repricing across asset classes remain open questions.