The Real Cost of Fiscal Dominance in Bond Markets

The National Debt Podcast with Fexingo: Treasury, Borrowing, and Long-Term Fiscal Outlook · Sep 18, 2026 · 8m · transcript

With the federal debt hitting nearly thirty-nine point one trillion dollars and the ten-year Treasury yield holding steady near five percent, we examine how the government’s borrowing strategy is reshaping bond market dynamics. Lucas and Luna break down the concept of fiscal dominance, exploring how persistent deficit spending forces central banks to keep rates higher for longer, even when inflation appears contained. This episode moves beyond simple debt service costs to look at the structural shift in who buys U.S. debt and what that means for long-term economic stability.

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