Fixed Interests

AI‑driven investment in data centers, compute capacity, and supporting infrastructure continues apace, raising important questions about future monetization and credit sustainability. In this episode of Fixed Interests, Justin Patrie, Head of Credit Commentary and Research, is joined by Alen Lin, Senior Director in Corporate Ratings, and Alex Bumazhny, Group Credit Officer, to examine recent developments around AI’s credit implications. The episode looks at whether current data center and compute capex is supported by future revenue potential, how value and cash flows may evolve across the AI value chain, and where overinvestment and disruption risks may emergeRelated resources: AI-Related Risks Rising for Software, Media, and Services CorporatesAI Revenue Potential Could Support Current Investment ScaleUS Public Power Planning Key to Absorbing Data Center Load Growth

Richard Hunter and Duncan Innes-Ker discuss how the Middle East crisis is affecting sovereign ratings and the macro-outlook. Impacts are contained so far, and much geopolitical risk is already built into ratings and headroom.Related Resources:Fitch Insights: Credit Implications of the Iran WarWorld Growth to Continue at Steady Pace if Oil Price Shock Short-LivedEgyptian Banks Are Well Positioned to Withstand Iran Conflict EffectsHigh Oil Prices Support PDP ABS Collateral Value; Hedges Limit Upside

From unsupported EV software to AI‑driven changes in office use and logistics, tech is reshaping collateral performance. Justin Patrie, Head of Fitch Ratings Credit Commentary and Research, and Suzanne Albers, Senior Director in Structured Finance, look at pressure points such as outdated EV systems, shifts in office demand linked to AI adoption, and the widening gap between legacy and modern logistics sites. Taken together, these trends are influencing risk across auto ABS, CMBS, and RMBS and accelerating how these sectors respond to the faster pace of technological change.Related Resources:Accelerating Technology May Increase Obsolescence Risk Within ABS, MBSStable Arrears Protect European Auto ABS Against Near-Term RiskU.S. CLO Note Ratings Resilient to Severe Software Sector Stress

Thomas Rookmaaker and Harry Hu evaluate recent youth‑led protests in several Asian countries, driven by concerns over governance, living costs and unemployment, and their implications for sovereign credit profiles and political transitions.Risk of Political Flare-Ups to Linger in 2026 for Some APAC SovereignsAsia ‘BBB’ Sovereigns Show Strong Growth; Fiscal Risks DivergeDurable Coalition Key to Thailand's Fiscal Outlook After Elections

Justin Patrie and Sarah Repucci unpack Fitch’s Global Credit Outlook, highlighting resilient credit conditions, pressures in China and Canada, and key risks, including strain on lower‑income U.S. consumers, tariff volatility and geopolitical shocks.Global Credit Resilience to Face Major Tests in 2026Global Private Credit’s Burgeoning Scale, Complexity to Continue in 2026Geopolitical Tensions Raise Emerging Market Credit Risks in 2026Benign U.S. Credit Backdrop Faces AI, Consumer and Trade RisksGeopolitical Tensions Cloud Developed Europe’s Growth, Investment

Todd Martinez and Josh Grundleger discuss the US ouster of Nicolas Maduro, the revived Monroe Doctrine, and key risks for Latin America, including oil investment, debt restructuring, regional market reactions, and impacts on migration and tourism.

Brian Coulton and Ed Parker discuss Fitch’s Global Economic Outlook, reviewing where the world economy stands at the close of 2025 and key trends for 2026, from AI-driven investment and resilient U.S. equities to China’s sharp investment slowdown.

Lyuba Petrova, Lyle Margolis and Justin Patrie examine bubble risks as equities surge, credit spreads tighten, private credit faces hidden vulnerabilities and AI investment accelerates, though valuations suggest buyers aren’t overpaying.

Shelly Shetty and Todd Martinez analyze Argentina’s mid-term elections, what Milei’s stronger legislative backing means for reforms, and the lingering risks around reserves and external liquidity.

James Longsdon, Head of Global Sovereigns and Supranationals, and Federico Barriga Salazar, Head of Western European Sovereign Ratings, discuss Western Europe’s fiscal divergence, recent upgrades and downgrades, and Fitch’s deficit outlook.

Justin Patrie, Head of Credit Commentary & Research, and Sarah Repucci, Senior Director, Credit Commentary & Research, discuss emerging challenges for the AI-fueled US data center boom, covering investment, rising costs, impact on utilities and more.

Paul Gamble, Head of Middle East and Africa (MEA) Sovereigns, and Cedric Berry, Director, MEA Sovereigns, discuss GCC efforts to diversify their economies beyond oil, and the varied pace of progress across the region.

Justin Patrie and Duncan Innes-Ker discuss how emerging market credits are faring this year amid slower global growth, geopolitical risks, and shifting U.S. policy - highlighting ratings resilience and modest positive momentum.

Justin Patrie and David Prowse discuss key themes from Fitch’s Global Credit Risk Outlook, including slower growth, tariff uncertainty, and weaker credit conditions—as well as the overall ratings resilience amid these challenges.

Thomas Rookmaaker, Head of APAC Sovereign Ratings, and Krisjanis Krustins, lead analyst for Japan, discuss Japan’s fiscal outlook, covering the impact of rising bond yields, fiscal populism and long-term spending pressures.

Brian Coulton, Chief Economist, and Ed Parker, Sovereigns Managing Director, discuss Fitch’s mid-year Global Economic Outlook, focusing on global growth forecast updates since April and how tariffs are driving key changes to projections.

The credit outlook for global corporates has worsened in 2025, with 14 sectors and sub-sectors deteriorating at mid-year vs. 5 at end-2024. Justin Patrie and Carla Taylor, Head of Research for the Americas, discuss the drivers and implications.

Paul Gamble, Senior Director of Sovereign Ratings, and Erich Arispe, Head of Emerging Europe Sovereign Ratings, discuss the credit implications and common themes of the 2025/2026 electoral cycle in Central and Eastern Europe.

Fitch's 2Q25 Risk Headquarters report highlights a worsened risk outlook amid US tariff volatility. David Prowse and Justin Patrie discuss key points from the report, centered around how Trump-era policies continue to elevate investor concerns.