The Economic Times

US Market: Rising R-star adds to pressure on US Treasury yields as AI investment, borrowing lift demand for capital

US Treasury yields are rising partly on expectations that R-star, the economys neutral interest rate, may be structurally higher. Heavy government borrowing and AI investment are boosting capital demand, potentially keeping rates elevated longer. A higher R-star could limit Federal Reserve rate cuts, pressure Treasury prices and increase borrowing costs across the economy.