Fitch Warns of Deteriorating Global Markets Amid AI Boom and Rising Yields Fitch Ratings warns that global credit risk is worsening into 2027, citing uncertainties surrounding AI investment, high energy prices, and tightening financing conditions. Fitch expects the Federal Reserve policy rate to reach 4.25% and remain at that level throughout 2027, with one more rate hike anticipated this year. The agency projects the US 10-year Treasury yield to reach 4.8% by the end of 2027, but warns that a prolonged disruption in the Strait of Hormuz could push yields higher. Fitch also emphasizes that spending on AI infrastructure may exceed sustainable demand, potentially triggering a sharp decline in investment.