Foresight No. 15: Fiscal Dominance Watch (full note, PDF)

Foresight, prospective note No. 15. Driss EFFINA, PhD. October 2026. PDF, 26 pages, 14 charts and diagrams, 14 tables.

For forty years the rich world ran on a simple division of labour: governments chose deficits, central banks chose interest rates, and the second did not bend to the first. Three developments now test that arrangement at once. Public debt is close to post-war highs and interest bills are rising faster than revenue; central banks hold between 9 and 26 percent of their governments’ debt after a decade of quantitative easing and have lost money on it; and in 2025 and 2026 the independence of the Federal Reserve was tested by a removal attempt, grand jury subpoenas and a Supreme Court case.

Inside the full note:

• What fiscal dominance is, and how to recognise it
• The fiscal arithmetic in 2026
• The plumbing: balance sheets, losses and backstops
• Political pressure, 2025 to 2026: a factual record
• A Fiscal Dominance Risk Index
• History as a benchmark
• The inflation it would take
• Four scenarios to 2032
• Leading indicators dashboard
• Implications for policy and for investors
• What to watch

Read the free preview: Fiscal Dominance Watch.