📝Fed Tightening Unlikely to Derail AI Investment: Nordea

Foreign flows into US securities are still going heavily into stocks and credit, suggesting growth- and AI-seeking demand remains the key near-term driver of dollar strength. Softer flows into USTs may hint at early fiscal credibility concerns, but we see this as a slower-moving H2 2027 risk rather than something currently offsetting the broader pull toward US assets, especially since a 25bp hike, or even the cumulative 75bp our forecast assumes, is unlikely to derail the AI investment boom, in our view. Capex of this scale from hyperscalers was initially funded largely through free cash flow, though financing is increasingly shifting toward debt. Even so, a move of this magnitude is unlikely to meaningfully raise the cost of that debt relative to the return profile hyperscalers are underwriting.- Nordea