The Future of the Bond Market

A senior Anthropic researcher put the odds of the end of humanity, his p(doom), above 10% this decade. The 10-year Treasury has crossed 5%. Can both be right?

AI’s impact on rates has been tackled by others. Bill Ackman recently asked on X if AI investment might be “unaffected by higher rates because winning the race for super intelligence has a near infinite ROI.” In an October 2025 paper, Chow, Halperin, and Mazlish argued that real rates should rise under Armageddon and utopian scenarios alike as both reduce the incentive to save.

These arguments reason forward in time. I want to tackle the question through backward induction.

Imagine it is 9 years, 364 days from now, the eve of Judgment Day. You and Sarah Connor are either saying your final prayers or taking an inventory of your remaining ammunition. If you still had a Bloomberg terminal, where would it quote Treasuries? They are worthless at this point. Working backward in time from J-Day, bonds would have lost their value once the handwriting was on the wall as p(doom) approached 100%.

So, that's the price of the doom tail of outcomes. Now, let's do the p(boom) tail for our multiverse.

Under this scenario, life looks pretty good. Abundance is omnipresent as every person has a Star Trek replicator machine that can instantly produce food or any physical object with no need to work, disease has been wiped out, world peace has arrived, and we are well on our way to colonizing other planets in our solar system and beyond. What will the bond market look like? In a world of infinite abundance, financial capital is not needed and there is no longer a tradeoff between current and future consumption of physical goods.

The counterintuitive conclusion is that doom and boom both mean the end of the bond market. Doom means there is no one left to pay you, and boom means no further need for financial capital. Today’s yields must somehow reconcile those tails and everything in between.