The US 10-year Treasury yield crossed 5% this week, and the 30-year briefly touched 5.3% in August, its highest level since 2007.
The standard explanation is government deficits. Sylvain Huard's is that borrowers of every kind are now competing for a pool of capital that central banks have stopped topping up — and that the largest new competitor is the artificial-intelligence build-out.
"This is not just a fiscal story. It's a story about capital scarcity."
Huard is Head of Asset Allocation at Standard Chartered, based in Singapore, and sets the positioning the bank recommends to its wealth clients.
The full segment is covered here so you can skip it.
Here are the 5 calls that matter.
👤 Speaker: Sylvain Huard, Head of Asset Allocation at Standard Chartered, based in Singapore
📰 Published: 15 September 2026 on YouTube (Standard Chartered Wealth Insights)
🔴 YouTube | 🟣 Apple Podcasts | ⏱️ 4 min
Key Takeaways
The move to 5% is about who is buying, not about deficits
Quantitative easing has become quantitative tightening, so private investors absorb the supply and want paying for it
AI capital spending is now a direct competitor to governments for capital
$260 billion in 2024, around $900 billion this year, and $1.2 trillion forecast for 2027
Big technology companies cannot fund the build-out from cash flow and are issuing bonds hard
Most of the repricing may already have happened
Long-term inflation expectations are still around 2%, so the move came from real yields and term premium, both at levels not seen in decades
Equities are not dead at 5%, because they have earnings and government bonds have supply
In bonds he wants the 3-to-7-year part of the curve, and gold as insurance
Central banks are adding to gold reserves at a record pace
1. Yields Cross 5%
Huard opened with where long-term borrowing costs have got to.
The US 10-year Treasury yield crossed what he called a symbolic 5% threshold this week
Further out the curve, the 30-year briefly touched 5.3% in August, its highest level since 2007
The move is not confined to the United States. Long-term borrowing costs have jumped in the UK, Germany and Japan as well
The question he set for the episode is a positioning one: can equities still rally if yields stay at 5% or higher
2. Not Fiscal, But Scarcity
His reframing is the argument the rest of the episode rests on. "This is not just a fiscal story. It's a story about capital scarcity."
The old regime is the comparison. For years after the financial crisis, he said, capital was abundant and cheap: central banks bought large quantities of government bonds through quantitative easing, and governments borrowed at exceptionally low rates
What changed is the identity of the buyer. "Quantitative easing has become quantitative tightening." Official buyers have stepped back
That leaves the supply to someone else. Private investors now have to absorb more of it, and — in his phrasing — they want to be paid for it
3. AI Capex Competes for It
The twist he added is that governments are no longer the only bidders. "But here's a twist. Governments are not the only ones competing for capital anymore. The AI investment boom is a direct competitor."
The spending path he gave: capital expenditure has surged from $260 billion in 2024 to around $900 billion this year, and he sees it reaching $1.2 trillion in 2027
The funding gap is what turns that into a bond-market story. "Even big tech companies are not able to fund this investment from cash flow alone. They are tapping bond market quite hard."
4. The Repricing May Be Done
His first piece of evidence is what has not moved. "The good news is that long-term inflation expectations are still contained around 2%."
What has moved is the other half of the yield. The move has come from real yields and term premium, not an inflation scare, and he said both are already at levels not seen in decades
The conclusion he drew from that is hedged rather than flat. "So actually much of the repricing may be behind us."
5. Own What Earns Its Way
His verdict on equities is a comparison between two sets of issuers. "We believe equities are not dead yet." The investment boom is competing with governments for capital, but "equity markets have earnings to show for suspending while government bond markets just have more supply to absorb"
The rule that follows: "We recommend owning assets that can actually earn their way through higher rates."
He argued this is now the normal state rather than an exception, naming 2021, 2023, 2024, 2025 and this year as the same regime
The equity call is an overweight with geographic spread. Standard Chartered maintains its overweight in equities but recommends staying diversified across the US, Europe and Asia
On what to do inside that, he named the rotation and a sector. Embrace the current rotation as earnings broaden globally, and stay invested in AI selectively, favoring semiconductors
The fixed-income call is a specific part of the curve. "We recommend extending selectively into the 3-to-seven-year part of the bond curve to gain attractive yield without long-end duration pain" — that is, the price losses that come with owning the longest-dated bonds when yields rise
Gold is the insurance leg, which he says earns its place against fiscal stress and currency debasement, particularly as central banks keep adding to reserves at a record pace
His closing framing is a warning about complacency. "Higher rates and a strong equity market can coexist, but this environment reward selectively, not complacency." He signed off with "Stay invested, stay diversified."
Bonus Insights
The format is a solo briefing rather than an interview. Cut to the Chase is the short segment inside Standard Chartered Money Insights, and Huard presents it alone, with no host and no guest
He structured the four minutes as three questions in order — why yields are climbing, how much higher they can go, and how to position a portfolio in the resulting regime
Both of his forward-looking claims carry a hedge, and the hedges are his own. Equities are "not dead yet", and much of the repricing "may" be behind us
Huard's bottom line is that the rise in long-term yields is a competition for scarce capital between governments and the AI build-out rather than a verdict on deficits, and that the response is to keep an overweight in equities — which have earnings — while extending only into the 3-to-7-year part of the bond curve and holding gold against fiscal stress.
Products, Companies & Tools Mentioned
Standard Chartered (His employer, whose asset allocation calls the episode sets out)
Watch the full episode:
If this was worth your time, send it to someone who has to have a view on this.
Get the latest market chatter as it happens: