‘The demographic dividend of the last 40 years is ending’: J.P. Morgan says the world is running out of the two things that kept interest rates down

In 2025, the IMF reported that, across the globe, companies, households, and countries had amassed $251 trillion in debt. Looking toward the end of 2026, J.P. Morgan has warned that interest rates on such borrowings are set to spike, owing largely to dwindling populations and diminishing fiscal discipline.In a note yesterday, JPMorgan’s Joyce Chang and team unpacked the “six D’s” that will shape the global economy: Deficits, deregulation, de-carbonization, de-population, de-globalization, and de-dollarization.Of these factors, two in particular will put upward pressure on borrowing rates around the world: Deficits and de-population.

Turning first to deficits, JPM’s research team wrote that “a global breakdown in fiscal discipline is occurring in all corners of the world, and fiscal dominance is eclipsing monetary policy. Global public debt has reached $100 trillion, reducing fiscal space, while elevated deficits are driving up interest rates.”

Among economists, there is some debate as to the extent to which deficits drive interest rates. The theory is that an expanding national debt may spark fears that the government is less creditworthy, and the........

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