AI spending squeezes market liquidity as refinancing demand adds pressure

AI capital spending and a strong real economy are absorbing funds that would otherwise support financial markets, potentially deepening the liquidity squeeze. Refinancing existing debt could add to funding pressures across stocks and bonds. Speaking with David Lin in an interview recorded on October 22, Michael Howell, founder and chief executive of GL Indexes, said rising demand for capital from the real economy was driving the decline in liquidity. He argued that monetary tightening alone could not explain the strain, as AI investment and broader economic activity draw funds away from financial assets.

Source: TokenPost