Yardeni Says AI Bubble Is Deflating Gradually as Bond Yields Rise

WHY IT MATTERS

When people talk about a "bubble" in investing, they mean a situation where prices for certain assets have risen far above what many consider reasonable, often driven by excitement rather than fundamentals. Think of it like air being pumped into a balloon — eventually something has to give. A strategist is now saying the AI investment balloon is slowly losing air rather than popping all at once. The bond market is involved because bonds are a safer, more predictable type of investment. When bonds start offering better returns (higher yields), some investors move money out of riskier bets like AI-related assets and into bonds instead. This matters for crypto because crypto is also considered a risk asset, and the same forces that cool AI speculation — like rising bond yields — can also affect crypto markets.