**[CoreWeave Bond Plunge Rings Alarm Bells, Fed May Need to Reassess Rate Hike Pace]** BlockBeats News, October 20: Bloomberg columnist Jonathan Levin wrote that the bond yield of AI cloud computing service provider CoreWeave surged to 15% earlier this month. Meanwhile, yields on U.S. junk-rated and investment-grade corporate bonds have risen to their highest levels since 2025 and 2023, respectively, indicating that corporate financing costs are increasingly pressuring economic growth. In recent years, U.S. companies have relied on long-term debt issued during periods of low interest rates to withstand the impact of Federal Reserve rate hikes. However, as these debts gradually mature and refinancing costs rise, the tightening effect on corporate credit channels is becoming more apparent. CoreWeave, which relies on debt to purchase AI chips, expand data centers, and lease computing power, is particularly vulnerable to the impact of rising borrowing costs. Companies like Oracle, Alphabet, and Meta are also facing upward pressure on financing costs. The greater risk lies in the pressure of debt maturity. About one-quarter of the bonds in the Bloomberg U.S. High Yield Bond Index are set to mature within the next one to three years, with refinancing pressures around 2028 being particularly noteworthy. If credit spreads widen disorderly, it could lead to increased defaults, reduced corporate investment, and rising unemployment. Levin believes that moderate credit tightening could help cool the AI capital expenditure frenzy. However, if it evolves into uncontrolled credit tightening, it may amplify economic downside risks. Therefore, he advocates for the Federal Reserve to maintain the current interest rate range of 3.75% to 4% during its October policy meeting and carefully evaluate policy options for December. [Original Link]