McKinsey: Artificial intelligence spending may limit the Fed's rate cuts in 2026
AI-driven growth may keep the U.S. economy strong, thereby limiting the expected rate cuts by the Federal Reserve next year. Although the market expects the Fed to cut rates up to three times, Dustin Read of McKinsey & Company stated that faster growth brought by AI may require tighter policies, causing U.S. Treasury yields to rise. He expects the 10-year U.S. Treasury yield to increase from the current 4% to 4.4% by mid-2026.
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