The minutes released Wednesday from the Fed’s policy meeting last month revealed other risks that drew more concern, including stock prices.

“The staff judged that asset valuation pressures were elevated,” the Fed said. “Price-to-earnings ratios for public equities stood at the upper end of their historical distribution, reflecting, in part, expectations of strong earnings growth for technology firms and elevated risk appetite among investors.”

By contrast, Fed staff characterized vulnerabilities from nonfinancial businesses as “moderate,” ratcheting down from the more urgent “elevated” label.

Corporate debt has grown in the past few years, especially among publicly traded companies with investment-grade ratings, the minutes said.

“The financing of AI investment will likely entail higher debt issuance going forward, but low debt loads at most technology firms and muted aggregate debt growth in recent years suggest firms have the capacity to accommodate such growth,” it added.

That’s as tech giants have been pouring hundreds of billions of dollars into the AI boom, drawing on their massive cash flows as well as the bond market.

In the fourth quarter of 2025 alone, tech companies issued a record $108.7 billion in bonds, according to Moody’s Analytics, capping a full-year total of nearly $300 billion.

The borrowing binge has continued into the new year. About $15.5 billion in bonds were issued in the first two weeks of 2026. And earlier this month, Google parent Alphabet issued a rare 100-year bond, raising 1 billion pounds sterling or about $1.37 billion.

That’s as quarterly reports for so-called hyperscalers like Alphabet showed that the AI revolution’s insatiable need for cash is actually accelerating.

Microsoft, Meta, Amazon, Alphabet, and Oracle are expected to spend a combined $700 billion this year, up around 70% from 2025 levels.

For their part, Fed policymakers also flagged concerns about high stock valuations and tech debt.

“Some participants discussed potential vulnerabilities associated with recent developments in the AI sector, including elevated equity market valuations, high concentration of market values and activities in a small number of firms, and increased debt financing,” the minutes said.

The surging supply of corporate bonds could even collide with the explosion in federal debt. As the Treasury Department looks to ensure investors continue absorbing the fresh volume of bonds it must sell, growing competition from companies issuing their own bonds could send rates higher, Apollo Chief Economist Torsten Slok warned last month.

Estimates for the volume of investment grade debt on the way this year now reach as high as $2.25 trillion. At the same time, the federal government’s annual budget deficit is hitting $2 trillion.

“The bottom line is that the volume of fixed-income products coming to market this year is significant and is likely to put upward pressure on rates and credit spreads as we go through 2026,” Slok said.