Who's behind the bond bear market? HFE's Weinberg explains

• Large-scale AI investment (estimated $500-600 billion last year, with another $200 billion coming) is absorbing a significant amount of global savings.
• This AI borrowing, combined with government deficits, is 'crowding out' other investments, particularly from small businesses, leading to rising bond yields globally.
• The concentration of investment in the AI sector increases the overall riskiness of the aggregate global portfolio, raising concerns about potential market instability if the 'AI trade' falters.

Carl Weinberg argues that the global bond sell-off and rising yields are primarily driven by the massive borrowing needs of large-scale AI investment, which now rivals government deficits worldwide. This 'crowding out' effect diverts savings from other sectors, increasing the risk in the global portfolio due to concentrated bets on AI.