U.S. Debt Fluctuations Surge Amid AI-Driven Borrowing Growth and Fed Faces Fiscal Uncertainty

The U.S. Debt Volatility Index reached its highest point in a month at the start of November, highlighting ongoing market unease even after the government averted a shutdown. Although Congress agreed on a funding deal to keep federal agencies running, investors remained cautious about larger fiscal threats, such as the rapid increase in AI infrastructure debt and weak economic indicators that could postpone interest rate reductions by the Federal Reserve.

Gold and silver prices jumped in response to the uncertainty, with analysts as a major factor.

The shutdown, which persisted for more than a month, interrupted the release of vital economic statistics, leaving both policymakers and investors without a clear picture of economic conditions.

to prioritize the release of November’s employment and inflation data to help guide the Fed’s December policy decisions. Since the last jobs report was published in September before the shutdown, in labor market analysis, potentially complicating the central bank’s choices.

At the same time, the AI sector’s rapid growth is driving a sharp increase in data center borrowing, which has soared 112% year-over-year to $25 billion projected for 2025. This growth is fueled by large-scale projects needing advanced GPUs and cloud systems, with leading tech companies like

, , and Alphabet raising $75 billion in bonds and loans since September. Morgan Stanley will total $2.9 trillion between 2025 and 2028, with half of that requiring outside funding. Still, this surge in borrowing is raising alarms about excessive leverage, especially as AI equipment loses value quickly and speculative construction projects may not secure tenants. for U.S. data center firms has risen to 5.3 times, up from 3.7 times in 2023.

The Federal Reserve’s policy outlook remains uncertain due to conflicting economic signals.

reported for October 2025 increased the likelihood of a December rate cut to 68%, up from 62% before the data was released. The U.S. dollar weakened as markets anticipated looser monetary policy, causing the EUR/USD and GBP/USD exchange rates to climb. Meanwhile, indicated that the central bank would soon resume asset purchases to maintain sufficient reserves after ending quantitative tightening, a move that could affect long-term interest rates.

Gold advanced 2% to $4,079.78 per ounce, while silver gained nearly 3%, as investors sought safety amid fiscal and geopolitical worries. Ole Hansen from Saxo Bank observed that higher bond yields reflected “fiscal concerns” rather than inflation, a pattern that has benefited precious metals.

to 2.25%—despite internal disagreements over timing—also underscored the cautious stance of global central banks, as they weigh inflation risks against economic vulnerability.

Looking forward, markets remain divided over the dollar’s strength and the Fed’s next moves. Although reopening the government will restore the flow of economic data, delays in October’s jobs and inflation reports may hinder precise policy adjustments. Analysts caution that the combination of debt-fueled AI infrastructure expansion and shaky fiscal fundamentals could keep volatility elevated. For now, the rise in the Debt Volatility Index signals a market still wrestling with uncertainty—a clear indication that resolving the shutdown has not eased deeper worries about U.S. debt and economic stability.

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