The Macro Minute: Will increased competition for capital cause a correction in stocks?

Increased competition for capital is rapidly accelerating the risk of a transitory bearish correction in stocks as long-duration debt becomes a primary investor concern. Global sovereign bond yields are surging to multi-decade highs, with the 30-year U.S. Treasury reaching 2007 levels and the UK gilt hitting 1998 levels, driven by inflation worries and the massive financing requirements of the AI capital expenditure bubble. While the next 12 months remain bullish due to favorable growth and liquidity cycles through 2027, the immediate future faces volatility from monetary policy headwinds. The allocation of $2 trillion to $3 trillion toward AI infrastructure is significantly shifting the long end of the yield curve, forcing sovereigns to navigate a "cut-grow-print" framework. Failure to manage this supply-demand imbalance through economic growth or monetary expansion historically leads to the final stage of the paradigm: major political realignment and total war.