Lagarde says AI bond issuance has had no significant impact on government yields so far
ECB President Christine Lagarde said the bank’s analysis finds no significant impact so far from hyperscaler bond issuance on government bond yields, with only small and temporary effects on similar corporate issuance. In a letter to European Parliament members, she warned that AI-related issuance is expected to grow substantially and its future market impact remains uncertain. She said falling equity valuations and market contagion would likely be the main spillover channels to the euro area in an adverse shock, while direct exposure to AI-related debt remains low.