Asset Management: Monthly Macro Insights - September 2026

The AI investment boom is sustaining global growth but is also increasing inflation, interest-rate and financial-stability risks.

• The largest hyperscalers are expected to spend around US$2 trillion between 2025 and 2027, increasingly outpacing earnings and free cash flow and encouraging some companies to raise debt financing.
• Bottlenecks in electricity generation, advanced semiconductors and grid equipment may encourage firms to over-invest, while the productivity benefits of AI could take years of complementary investment and organisational change to materialise.
• Trade fragmentation and tensions with US allies could gradually reduce demand for dollar-denominated assets, raising US financing costs and weakening the capital inflows that support large fiscal deficits.
• Services inflation remains elevated, while conflict involving Iran, higher fertilizer costs and climate-related damage to harvests could keep food-price inflation high in the coming quarters.
• Long-term interest rates have reached their highest levels in more than fifteen years as inflation remains persistent, fiscal deficits widen and AI-related financing increases demand for long-term capital.

Takeaway: AI may deliver substantial long-term productivity gains, but investors should account for the risk that overly optimistic expectations trigger an investment reversal, tighter financing conditions and broader market turbulence.