Pressure: Bonds, Buildings and the AI Boom

In this episode, recorded on September 18, we discuss the Census Bureau’s latest residential construction report, retail sales, rising Treasury yields, and developments in artificial intelligence. Housing completions fell 12 percent in August from the previous month and were 27 percent below their August 2025 level, leaving completions near levels last seen during the Global Financial Crisis. Retail sales exceeded expectations, but the headline strength was less impressive beneath the surface. Much of the increase can be attributed to higher prices and spending at gasoline stations and food services and drinking places. Meanwhile, yields on 10 year Treasury notes and 30 year Treasury bonds continued to climb as uncertainty surrounding the conflict in the Middle East intensified and concerns around the national balance sheet grew. Finally, leaders of several of the largest frontier AI labs called for a slower pace of AI development. Such restraint could weigh on AI related investment in the near term, potentially removing one of the principal supports for the recent equity market rally.