One of my Diligence Wealth Club members asked: “As the US Treasury’s debt problem grows, it is stepping up its intervention in the bond market. In the scenario where government borrowing goes up, and AI infrastructure investment (investment-grade (IG) borrowing) rises at the same time, which we are seeing now, there will be more competition for investor money.  The required return could rise further. It’d be interesting to see how this pans out for the equity markets. Willie, with your past experience in the bond markets, can you share, from your perspective, how you see this scenario might play out?” It’s a very good question. And I thought I want to share with my readers today. First, while the Fed controls the short-term interest rates, long-term interest rates are driven by market forces – central banks, fund managers, banks, etc. These institutions react to what’s going on in the world: a massive surge in AI-related borrowings, ballooning...