McKinsey: Artificial intelligence spending may limit the Fed's rate cuts in 2026

Artificial intelligence-driven growth could keep the US economy strong, thus limiting the extent of the Federal Reserve's expected rate cuts next year. While the market anticipates up to three Fed rate cuts, Dustin Reed of McKinsey & Company says that faster growth driven by AI may require tighter policies, leading to higher US Treasury yields. He predicts that by mid-2026, the yield on the 10-year US Treasury bond will rise from the current 4% to 4.4%. (Jinshi)