JPMorgan Private Bank Strategist Highlights AI‑Driven Productivity as Yield Driver
Jacob Manoukian, U.S. head of investment strategy at JPMorgan Private Bank, told the Reuters Global Markets Forum that the recent rise in long‑term U.S. Treasury yields may be signalling investor expectations of an AI‑driven productivity boost rather than being driven solely by inflation concerns or expanding government debt.
He noted that AI‑related debt issuance has already exceeded $220 billion in 2026, which is double the amount issued in 2025. In the same period, total U.S. corporate bond issuance has reached $1.68 trillion, representing an increase of nearly 27 % year‑over‑year.
Manoukian pointed out that semiconductors, a sector poised to benefit from AI spending, have experienced a correction of more than 20 %. The discount between the two‑year forward and trailing‑12‑month price‑to‑sales multiples for semiconductors has expanded to 40‑50 %, compared with a typical 20 %, suggesting that investors are pricing in weaker earnings expectations.
He added that the market appears to have already priced in a peak in earnings, yet he does not believe earnings have actually peaked. If semiconductor and other AI‑related companies achieve the sales levels already forecast by analysts, they could appreciate materially by 2028 while the market continues to apply the same trailing‑12‑month earnings multiples.
Manoukian also indicated that the surge in corporate debt supply—driven by hyperscalers increasing borrowing to fund data‑center and infrastructure expansion—could reduce demand for U.S. government bonds, thereby contributing to higher Treasury yields.