Bloomberg Surveillance · Wednesday, September 16, 2026
The US economy is experiencing an unprecedented capital spending boom, the largest in 150 years, which is driving both GDP growth and improving conditions in the stock and bond markets. This growth is leading to higher real rates as investment prospects improve, despite inflation concerns and supply-side shocks. Core inflation is rising due to this significant capital investment rather than just energy prices.
“frankly the fact that we have extraordinary investment occurring and that is driving GDP growth is what's really driving overall conditions in both the stock and the bond market.”
“Inflation expectations certainly have driven some of the movement in the long end of the curve, but most of this is just real rates going higher because growth prospects are improving, along with enormous capital spending.”
“I mean, we're in the midst of the largest capital spending boom in at least 150 years of U.S. history, and that's creating different outcomes.”