Every government runs on borrowed money. Roads, pensions, armies, and alliance commitments are all paid for by selling bonds to investors at home and abroad. For two decades, low interest rates and central bank support kept that relationship in the background. Now borrowing costs in the United States, the United Kingdom, Japan, and France have climbed to levels not seen in decades, and public debt across advanced economies is at historic highs. Lenders are once again shaping what governments can afford, from defense budgets and NATO spending pledges to industrial policy at home. The question isn’t simply whether yields are rising. It’s whether bond markets have become a real check on how governments spend, defend, and project power.
Is today’s bond market pressure a new constraint on heavily indebted governments, or a familiar market discipline returning after years of easy money? Does the dollar still give Washington room that London, Tokyo, and Paris lack? And which commitments are most exposed if investors start setting the limits?
Join us for a discussion with Professor Darrell Duffie, Adams Distinguished Professor of Management and Professor of Finance, Emeritus, at Stanford Graduate School of Business; Professor Barry Eichengreen, Professor of Economics and Political Science at the University of California, Berkeley; and Rebecca Patterson, Senior Fellow at the Council on Foreign Relations’ Greenberg Center for Geoeconomics and former Chief Investment Strategist at Bridgewater Associates, on how bond markets are shaping the limits of sovereign power.
Listen on: Spotify | Apple Podcasts
Music by Aleksey Chistilin from Pixabay.
