Bessent Downplays AI Financing Concerns: New Cloud Providers Account for a Very Small Share, Not a Problem at All

Cailian Press Financial News Agency

Open APP

Cailian Press, Bian Chun, Editor-in-Charge Lin Qi, 2026-10-29 16:59

① U.S. Treasury Secretary Bessent on Wednesday played down concerns about AI financing; ② When asked about yields on some AI-related debt starting to surge to double digits, he said this is not a problem at all, as new cloud service providers account for only a very small part of the entire ecosystem; ③ When asked whether he would regard any future Fed rate hike as a policy mistake, Bessent said, "Not necessarily."

Cailian Press, October 29 (Editor Bian Chun) — U.S. Treasury Secretary Scott Bessent said on Wednesday that he and his team are closely monitoring the financing situation of artificial intelligence (AI) infrastructure and played down some recent worrying signs.

When asked in an interview about yields on some AI-related debt starting to surge to double digits, Bessent said: "We are monitoring all of this. I think it is not a problem at all, because we see that new cloud service providers account for only a very small part of the entire ecosystem."

CoreWeave is at the "epicenter" of this concern. As the company's bond yields at one point surged to around 15%, its stock price has fallen about 25% over the past month.

"We still see financing getting done, and deals are still being reached," Bessent said. "We also see companies like Meta deciding to raise funds through equity."

Further Fed rate hikes are not necessarily wrong

Bessent made the remarks shortly after the Fed announced its latest interest rate decision. The Fed held steady on Wednesday, after raising rates by 25 basis points in September.

When asked whether he would regard any future Fed rate hike as a policy mistake, Bessent said, "Not necessarily."

He cited strong economic growth and once again called on policymakers to keep an "open mind" and consider that the impact of energy shocks on U.S. inflation may only be "temporary."

Bessent reiterated that he and U.S. President Trump have confidence in Fed Chairman Kevin Warsh. He said both he and Trump believe Warsh is performing well and can strike a balance between ensuring full employment and stabilizing prices.

"I think Chairman Warsh has gotten off to a good start," Bessent said. "As I often say, I have full confidence in him."

Bessent also reiterated that he and Trump both believe that once the United States moves past the impact of the Iran conflict, the oil market will have ample supply. He believes this will help ease inflation and lower borrowing costs.

Recently, U.S. debt yields have retreated from their highest levels in more than two decades, although the benchmark 10-year U.S. Treasury yield remains above 5%.

Bessent attributed part of the currently elevated 10-year Treasury yield to the Fed's rate cut decision before the 2024 election, suggesting that the rate cut, which began with a 50-basis-point move at the time, had a profound impact on the trajectory of long-end rates.

"The 10-year yield has never looked back since then," he said. "I have always held the bond market in great awe, and as Chairman Warsh said in the July decision, the bond market has already done a lot of the tightening work for us."

U.S. Economy

Fed Developments

Cailian Press statement: The content of this article is for reference only and does not constitute investment advice. Investors who act on it do so at their own risk.

Business Cooperation

Popular Unlocks

[Institutional Research] This memory chip supplier has completed a small-computing-power layout in the intelligent vision SoC field

This memory chip company has become a major supplier to leading AI server manufacturers and has completed a small-computing-power layout in the intelligent vision SoC field.

[Research Selection • Margin Trading Data] Robots + Pharmaceuticals + PCB + Chips + AI Applications: Net margin financing purchases in five major hot spots over the past week (attached table)

Robots + Pharmaceuticals + PCB + Chips + AI Applications: Net margin financing purchases in five major hot spots over the past week (attached table).

[Research Selection • Industry Data] Food and beverage holdings bottom out and recover; analysts judge that the orderly clearing of baijiu has clear bottom signals

Food and beverage holdings bottom out and recover; analysts judge that the orderly clearing of baijiu has clear bottom signals (attached table).

Related Reading

Does the Fed's pause not mean a pivot? Bank of America says: possible 25-basis-point hikes in December and March next year!

Cailian Press, Huang Junzhi, 2026-10-30 11:32

① Bank of America expects rate hikes of 25 basis points in December 2026 and March 2027, respectively, raising the federal funds target range to 4.25%–4.50%; ② At its October meeting, the Fed voted 10 to 2 to keep the federal funds target range unchanged at 3.75% to 4%.

Could the Fed hike by a sharp 50 basis points in December? Its favorite inflation gauge heats up, former vice chair makes a major prediction

Cailian Press, Bian Chun, 2026-10-30 10:12

① Former Fed Vice Chairman Roger Ferguson said on Thursday that a 50-basis-point rate hike in December is possible, depending on how events develop; ② As the Fed's favorite inflation gauge, the U.S. personal consumption expenditures (PCE) inflation rate accelerated in September; ③ Ferguson expects the Fed to raise rates in December and possibly raise them another one or two times in 2027.

U.S. third-quarter GDP grows 3.4% annualized, beating expectations, inflation pressure remains

Cailian Press, Xia Junxiong, 2026-10-29 22:22

① AI investment continues to support economic growth, with equipment investment rising 20.9% annualized in the third quarter and domestic underlying demand growth rising to 4.9%; ② In September, gasoline and other energy commodity prices rose 9.2% month on month, and average real hourly wages in the United States fell year on year for six consecutive months, putting pressure on household purchasing power.