AI financing has been harder and more expensive to come by as the capital-spending boom comes under more scrutiny
A humanoid robot by DOBOT makes a heart shape with it’s hands at trade fair in Sept 2026 in Berlin.
Pressures on Wall Street around financing the artificial-intelligence build-out have investors on edge, especially as the Federal Reserve’s prepares to make its next decision on interest rates on Wednesday.
Scrutiny of the AI build-out has been ramping up for months, but has escalated further since the Fed raised interest rates for the first time in three years on Sept. 16.
The market suddenly has begun to pick up on the fact that “capital isn’t infinite,” said Loren Moran, fixed-income portfolio manager at Wellington Management. “I do think the Fed will probably show some early signs of awareness of financial conditions tightening.”
Wall Street isn’t expecting the Fed to hike rates this week, but the odds were at 73% for another hike in December, with several more increases anticipated in 2027, according to the CME FedWatch Tool.
Yet concerns about weaker parts of credit markets have become “much more glaring” since mid-September, Moran noted. “The winners are still winning, but the losers keep getting pummeled,” she said.
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