September 18, 2026

Fed Chair Kevin Warsh has been remarkably consistent. He has repeatedly said the Fed will deliver price stability. Wednesday’s rate hike shows that he means it. There is another important parallel with former Fed Chair Paul Volcker: no forward guidance. Volcker did not tell markets what the Fed would do at the next meeting. Warsh takes the same approach. The bottom line is that Warsh is following the number one principle for successful central bankers: say what you do, and do what you say.

September 17, 2026

Securitization of US data center debt has totaled $81.4 billion since 2018, of which $18 billion was in 1H 2026 alone, see the first chart below. The EU has seen just $1.7 billion, of which $0.9 billion was in 1H 2026. The UK is little better, with $2.3 billion since 2018, of which $1.1 billion was in the first half of the year. The gap extends beyond just data centers to other strategic assets. US solar securitizations have raised $29.3 billion since 2018, compared with just $1.1 billion in the EU, see the second chart below. Part of the problem has been overly burdensome securitization rules compounded by insurance regulations that have discouraged European life insurers. EU life insurers hold just 0.33% of their investment assets in securitizations, compared with roughly 17% for US life insurers, despite the two industries being similar in size. The EU has proposed tweaks to its securitization rules, but the changes are modest relative to the scale of the financing challenge. If Europe wants to narrow the AI investment gap with the US, it will be harder if one of the markets helping finance the US data center buildout remains largely closed in Europe. Written by Huw van Steenis, London

September 16, 2026

The widening in hyperscaler CDS is not driven by dealer hedging of new issuance. If it were, bank CDS would be widening too, given that banks remain the single largest source of IG supply, and instead bank spreads have sat flat near 40 bps. What the market is repricing is hyperscaler credit fundamentals, namely a debt-financed AI capex cycle with rising leverage, negative free cash flow and uncertain payback on depreciating assets.