Excess Returns · Thursday, September 3, 2026
Ben Hunt explains the crowding-out effect in the capital markets, where the immense funding needs of AI companies and governments will drive up the cost of money. He states that this situation creates a one-way bet on higher interest rates.
“The hyperscalers, they all require trillions in capital over the next couple of years to do this build out. We have a crowding out effect.”
“And what always happens in these situations is the price of money goes up. That is the inescapable outcome of too little money chasing too many borrowers.”
“It's a one-way bet on long-dated interest rates. Which is what we're seeing.”