Trumponomics Trump Isn’t the Only Reason the Price of Money Is Rising
Sep 10, 2025
Tom Orlik, Chief Economist for Bloomberg Economics, and Jamie Rush, Director of Global Economics at Bloomberg, dive into the complexities of rising interest rates and their broad implications. They discuss how global factors like defense spending and deglobalization contribute to higher borrowing costs. The conversation highlights the intricate relationship between inflation, long-term borrowing, and investor expectations, all while underscoring the challenges governments face in this evolving economic landscape.
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Long-Term Forces Raising Interest Rates
- Interest rates are rising due to long-term structural factors, not just short-term central bank moves.
- These forces include demographics, defense spending, and deglobalization that reshape global saving and investment.
Security Shift Raises Borrowing Needs
- The end of the Pax Americana is forcing allies to increase defense spending and borrow more.
- Rising government borrowing for defense exerts upward pressure on global interest rates.
France's Fragile Politics Hit Bond Yields
- France's borrowing costs rose because political fragmentation undermined confidence in fiscal control.
- Local political risks can amplify global rate moves and even topple governments, as seen in France.
