[Analysis: AI Bond Issuance Has Limited Impact on U.S. Treasury Yields, 10-Year Yield May Drop to 4.25% by End of 2027] Capital Economics analysis indicates that the sell-off in U.S. Treasuries is primarily driven by changes in market expectations for near-term interest rates. Currently, the 10-year U.S. Treasury yield is nearing its June 2007 peak. Economist James Reilly pointed out that this trend is more reflective of rising oil prices and the robust U.S. economy, rather than being driven by AI-related bond issuance or fiscal concerns. Reilly predicts that as the Federal Reserve's tightening measures fall short of current investor expectations, the 10-year U.S. Treasury yield will "drop significantly to 4.25%" by the end of 2027. He believes that while AI-related bond issuance will continue to exert upward pressure on yields, its impact is not as significant as suggested by media reports and will be offset by changes in monetary policy expectations. As for fiscal concerns, he added that no substantial fiscal developments have recently emerged that would trigger a sharp spike in yields.