BAC · News · 20261102N

AI Infrastructure Economic Impact

BANK OF AMERICA CORP /DE/ · 2026-11-02 · Importance 8 · Surprise 24

BofA Global Research economists warned that a sustained correction in the AI trade is one of the larger risks to the U.S. and global economy. They said a slowdown could weaken growth directly through reduced spending and indirectly through a wealth effect that causes households to spend less as stock prices fall. The warning followed a three-week decline of about $5 trillion in AI stock market value, while the Nasdaq 100 ended Friday about 9% below its October 6 record.

Key facts

• Bank of America’s Michael Hartnett recommended tech bonds after their relative returns hit a 30-year low following a 9% slide that year, arguing that investors are being paid more to finance the AI build-out and expecting relief in the first half of 2027. source
• BofA Global Research economists called a sustained correction in the AI trade “one of the larger risks to the US and global economy,” citing potential direct effects on growth through spending and indirect effects through the household wealth effect. source