The Spillover

In this episode of The Spillover, host Rebecca Patterson and former Federal Reserve Vice Chair Roger W. Ferguson Jr. reflect on the legacy of recently deceased former Fed Chair Alan Greenspan, and examine what may lie ahead for the Fed under its new chair Kevin Warsh. Hosts: Rebecca Patterson, Senior Fellow, Council on Foreign Relations (CFR) Guest: Roger W. Ferguson Jr., Steven A. Tananbaum Distinguished Fellow for International Economics, Council on Foreign Relations (CFR); Former Federal Reserve Vice Chairman (1999–2006) Description: On this episode of The Spillover, cohost Rebecca Patterson speaks with CFR Distinguished Fellow for International Economics Roger Ferguson about Kevin Warsh's first FOMC meeting as Chair of the Federal Reserve, which played out largely as predicted. To bring in fresh perspectives, Warsh has created five task forces. They cover communication, the inflation mandate, productivity and jobs, data collection, and a balance sheet framework. Well-led task forces have historically moved the Fed forward, but progress will likely be uneven and slower than hoped. As Roger Ferguson notes, “This is the kind of thing where you want to measure twice, cut once. Once you make the change, you're gonna have to live with it for a period of time.” Current conditions point to a rate hike rather than an ease. Core inflation appears stuck above three percent, energy-driven price pressures from the Iran war remain unresolved, while labor market and financial conditions are resilient. The Fed works with blunt tools and within limited frameworks. Its single national interest rate cannot target individual sectors like housing or specific prices, and its goal remains controlling inflation rather than propping up housing, or equity prices. The Fed also never established a clear framework for when and how to use its balance sheet as a monetary or financial-stability tool, or how quickly to unwind quantitative easing. AI is currently acting as an inflationary force, not a disinflationary one. It is driving a surge in capital expenditures that should push market rates somewhat higher to balance increased demand for capital. Patterson and Ferguson discuss the life of Alan Greenspan—including his daily engagement with the U.S. economy for over fifty years, his habit of tracking unconventional indicators like railroad car loadings, and the fact that he was more often right than wrong on major issues. As Ferguson notes, Greenspan was part of a group of economic policymakers in the second half of the 20th century that helped the U.S. economy grow globally, overcoming the Soviet Union. Mentioned on the Episode: Sebastian Mallaby, “Alan Greenspan Understood Power and Was Not Afraid to Wield It,” The Washington Post “Federal Reserve Issues FOMC Statement,” Board of Governors of the Federal Reserve Want to keep up with The Spillover? Sign up to receive an email alert when new episodes are released. The Spillover is a production of the Council on Foreign Relations. The opinions expressed on the show are solely those of the hosts and guests, not of the Council, which takes no institutional positions on matters of policy.

The scale of the SpaceX IPO is dominating financial headlines, but the more important story might be what the sale reveals about the structure of modern capital markets, corporate governance, and the blurry line between public and private investing. This episode unpacks what the numbers actually show, why much of the popular narrative is overblown, and what investors should actually be paying attention to. Hosts: Sebastian Mallaby, Paul A. Volcker Senior Fellow for International Economics, Council on Foreign Relations (CFR) Rebecca Patterson, Senior Fellow, Council on Foreign Relations (CFR) We discuss: How the SpaceX IPO could raise around $75 billion, making it the largest IPO in history, and value the company at $1.77 trillion. How subsequent IPOs by Anthropic and OpenAI could bring a wave of funding valued at close to $200 billion in total. Why the equity supply panic is overblown. SpaceX's alarming governance structure, under which Musk serves as CEO, CTO, and chairman simultaneously, holding a supermajority of votes despite a minority equity stake. How growth equity, unlike traditional private equity, offers zero oversight, often granting founders supervoting shares and investor loyalty pledges that amount to anti-governance rather than governance. How SpaceX's initial index weight will be tiny, since only a small fraction of the company will actually be publicly floated. How the S&P's profitability requirement is a deliberate lesson from the dot-com bust. Why SpaceX's revenue projections sound dazzling but tell only half the story, given that estimated capital expenditure could far outpace revenue through the end of the decade. Mentioned on the Episode: “IPOs: Number and Proceeds,” U.S. Securities and Exchange Commission Jason Dean, “U.S. Officials Said to Discuss Taking Stakes in AI Companies,” The Information Natalia Emanuel, Emma Harrington, and Amanda Pallais, “Remote Work Leaves Younger Workers Sidelined,” Federal Reserve Bank of New York Want to keep up with The Spillover? Sign up to receive an email alert when new episodes are released. The Spillover is a production of the Council on Foreign Relations. The opinions expressed on the show are solely those of the hosts and guests, not of the Council, which takes no institutional positions on matters of policy.

As governments around the world ramp up defense spending, a new era of rearmament is reshaping economies, markets, inflation, and politics. This episode examines Japan’s dramatic shift away from its postwar pacifist identity amid rising tensions with China, ongoing conflicts in the Middle East, and growing uncertainty around the global security role of the U.S. Hosts: Sebastian Mallaby, Paul A. Volcker Senior Fellow for International Economics, Council on Foreign Relations (CFR) Rebecca Patterson, Senior Fellow, Council on Foreign Relations (CFR) We discuss: Why the rearmament boom is globally synchronized and big enough to move fiscal balances and bond markets. How defense spending is colliding with already massive government debt, and pushing bond yields higher. Why Japan’s military transformation marks a significant reversal of its postwar identity. Why Japan’s debate over nuclear weapons remains emotionally raw more than eighty years after Nagasaki. How fear of China and doubts about the U.S. security umbrella are reshaping politics in Japan and Germany. How governments are trying to fund massive military buildups without cutting popular programs, and why bond markets may eventually force a reckoning. How rising military spending could fuel another wave of inflation, higher interest rates, and global market volatility, trapping central banks between fighting inflation and financing governments at war. As Rebecca Patterson puts it: “All this is happening when governments, frankly, can't afford more guns or butter because debt levels are very high.” How AI, drones, and cyberwarfare are rapidly changing the economics and strategy of modern conflict. How the new arms race is spilling far beyond the battlefield into tech, energy, supply chains, and the future of globalization. Mentioned on the Episode: David Kelly, “Five Scenarios for the Federal Debt,” J.P. Morgan Asset Management “Fiscal Policy under Pressure: High Debt, Rising Risks,” International Monetary Fund (IMF) “Global Supply Chain Pressure Index (GSCPI),” Federal Reserve Bank of New York “Majority of Japanese Support Constitutional Revision: Poll,” UPI “Rebuilding Our Military,” The White House “The True Cost of Peace: Rebalancing World Military Spending For a Sustainable and Peaceful Future,” United Nations “World Economic Outlook: Defense Spending,” International Monetary Fund (IMF) Want to keep up with The Spillover? Sign up to receive an email alert when new episodes are released. The Spillover is a production of the Council on Foreign Relations. The opinions expressed on the show are solely those of the hosts and guests, not of the Council, which takes no institutional positions on matters of policy.

President Donald Trump is set to meet with Xi Jinping in Beijing for a high-stakes summit shaped by Iran war tensions, trade disputes, critical mineral flows, semiconductor controls, and an intensifying AI race. This episode breaks down the growing U.S.-China rivalry, the risks facing global markets and supply chains, and whether the world is entering a new era of economic fragmentation and technological competition. Hosts: Rebecca Patterson, Senior Fellow, Council on Foreign Relations (CFR) Sebastian Mallaby, Paul A. Volcker Senior Fellow for International Economics, Council on Foreign Relations (CFR) We discuss: How President Trump’s high-stakes summit with Chinese President Xi Jinping comes at a moment of intense rivalry over AI, trade, semiconductors, and Taiwan. How the United States and China are locked into “mutually assured disruption” when it comes to trade, with China controlling critical rare-earth minerals and the U.S. restricting advanced AI chip exports. As Rebecca Patterson puts it: “If there’s not a happy hug between Trump and Xi on rare-earth minerals and chips, that might be problematic.” Whether Chinese AI firms like DeepSeek are catching up to American companies such as OpenAI and Anthropic despite U.S. semiconductor restrictions. The growing debate over AI safety and whether Washington and Beijing can cooperate on preventing dangerous applications of artificial intelligence while still competing for dominance. Why Taiwan remains the single biggest geopolitical risk hanging over global markets, semiconductor supply chains, and the future of the AI economy. How fears of a Taiwan crisis could ripple through global stock markets, especially tech and semiconductor companies tied to firms like TSMC, Nvidia, Intel, and Samsung. Why tariffs and supply chain disruptions continue to reshape global trade, with companies and governments from Europe to Southeast Asia forced to navigate a more fragmented global economy. Mentioned on the Episode: “At the Trump-Xi Summit, China Will Have the Upper Hand,” CFR.org Chris McGuire, “How Trump Should Approach AI Talks With China: Targeted Dialogue, Maximum Pressure,” CFR.org “Global Supply Chain Pressure Index (GSCPI),” Federal Reserve Bank of New York Ryan Mancini, “Trump’s Approval on Economy Hits New Low; 7 in 10 Expect Recession Next Year: Poll,” The Hill Xinyi Wu, “China, Indonesia Launch Cross-Border QR Payments – A Boost for the Global Yuan?,” South China Morning Post Want to keep up with The Spillover? Sign up to receive an email alert when new episodes are released. The Spillover is a production of the Council on Foreign Relations. The opinions expressed on the show are solely those of the hosts and guests, not of the Council, which takes no institutional positions on matters of policy.

This episode unpacks the concept of a K-shaped economy, examines how AI, war, and climate shocks may be widening inequality within and between countries, and explains why the divide is so hard to measure. It also explores competing responses to the affordability crisis—from Trump’s to Mamdani’s—and asks if a more centrist path could offer better solutions. Hosts: Rebecca Patterson, Senior Fellow, Council on Foreign Relations (CFR) Sebastian Mallaby, Paul A. Volcker Senior Fellow for International Economics, Council on Foreign Relations (CFR) We discuss: How a true K-shaped economy features a widening divergence in which some groups accelerate upward while others fall behind. Why measuring the K-shaped economy is complicated, with major disagreements over data and methodology. How asset ownership, not just wages, helps explain why wealthier households pulled ahead during and after COVID through equities, housing, and cheap credit. Why inflation, war-driven energy and food shocks, and different household spending patterns can deepen economic divergence, especially for lower-income households. How the “mega K” concept applies globally, with geopolitical shocks like the Iran and Ukraine wars worsening divides between rich and poor countries. How artificial intelligence and climate change could worsen the K phenomenon, disproportionately pressuring workers, poorer countries, and those without capital. How contrasting policy prescriptions—from Trump’s tariffs and immigration restrictions to Mamdani’s proposed taxes on wealthy second-home owners—reflect competing populist approaches to affordability. How a revival of “radical centrism,” combining fiscally responsible reforms with practical policies to manage inequality, AI disruption, and long-term economic inclusion might help. Mentioned on the Episode: “America’s Affordability Crisis Is (Mostly) a Mirage,” The Economist “Going Bananas Over Affordability,” Inside Economics “Compare Wealth Components Across Groups,” The Federal Reserve Want to keep up with The Spillover? Sign up to receive an email alert when new episodes are released. The Spillover is a production of the Council on Foreign Relations. The opinions expressed on the show are solely those of the hosts and guests, not of the Council, which takes no institutional positions on matters of policy.

Live from Washington, DC, this episode unpacks how war, AI, financial innovation, and global institutions are reshaping monetary policy, market stability, and the future of the international economic order. Host: Rebecca Patterson, Senior Fellow, Council on Foreign Relations Guest: William C. Dudley, Chair, Bretton Woods Committee; Former President and CEO, Federal Reserve Bank of New York We discuss: Whether monetary policy can still do the heavy lifting in a war-shaken macro environment. AI, productivity, and the inflation debate. The future of the Fed as an institution. The rise of non-bank finance and new financial stability risks. How global financial institutions and digital finance must adapt to structural change. Mentioned on the Episode: Pierre-Olivier Gourinchas, “War Darkens Global Economic Outlook and Reshapes Policy Priorities,” International Monetary Fund (IMF) “Chair Powell’s Press Conference” The Bretton Woods Committee Want to keep up with The Spillover? Sign up to receive an email alert when new episodes are released. The Spillover is a production of the Council on Foreign Relations. The opinions expressed on the show are solely those of the hosts and guests, not of the Council, which takes no institutional positions on matters of policy.

This episode dives into how the opaque growth and structural risks in private credit, combined with global supply shocks and market stress spurred by the Iran war, are creating a uniquely fragile and unpredictable economic landscape. Hosts: Sebastian Mallaby, Paul A. Volcker Senior Fellow for International Economics, Council on Foreign Relations (CFR) Rebecca Patterson, Senior Fellow, Council on Foreign Relations (CFR) We discuss: The rapid rise of private credit, its lack of transparency, and why recent bankruptcies are raising red flags. How $10 billion in redemption requests were submitted to major private credit funds in the first quarter of 2026—including major funds Apollo, Ares, and Blackstone. Why this moment isn’t a repeat of 2008, but still presents real risks due to government debt levels and the lack of safety nets for private credit. As Rebecca Patterson, CFR senior fellow, puts it: “No one has any idea what’s going to happen—and that’s exactly the challenge right now.” Current structural risks in private credit, including liquidity mismatches, redemption limits (“gates”), and growing exposure to retail investors. Why financial markets are behaving unusually, with rising bond yields and weakening traditional safe-haven assets. How central banks are stuck between fighting inflation and supporting growth, creating a far more complex policy environment than past crises. Mentioned on the Episode: Sebastian Mallaby, The Infinity Machine: Demis Hassabis, DeepMind, and the Quest for Superintelligence, Penguin Random House Want to keep up with The Spillover? Sign up to receive an email alert when new episodes are released. The Spillover is a production of the Council on Foreign Relations. The opinions expressed on the show are solely those of the hosts and guests, not of the Council, which takes no institutional positions on matters of policy.

As the U.S.-Israel conflict with Iran escalates, global markets are absorbing the shocks: oil prices are swinging, inflation expectations are rising, and safe-haven assumptions are being tested. China, by contrast, is looking relatively resilient, buoyed by strategic energy reserves, diversified supply chains, and policy flexibility. This episode examines how the conflict is driving inflation, complicating monetary policy, and handing China a geoeconomic edge. Submit Your Question For a Chance to Win a Copy of Sebastian Mallaby’s Book The Infinity Machine! Hosts: Sebastian Mallaby, Paul A. Volcker Senior Fellow for International Economics, Council on Foreign Relations (CFR) Rebecca Patterson, Senior Fellow, Council on Foreign Relations (CFR) Mentioned on the Episode: Sebastian Mallaby, The Infinity Machine: Demis Hassabis, DeepMind, and the Quest for Superintelligence, Penguin Random House Coco Feng, “China Issues New Safety Rules for OpenClaw. Here Are the Dos and Don’ts” South China Morning Post Hany Abdel-Latif and Adina Popescu, “Spillovers From Large Emerging Economies: How Dominant Is China?,” International Monetary Fund (IMF) Michael Langemeier and Joana Colussi, “Farmer Sentiment Drops Sharply at the Start of 2026 as Economic Concerns Increase,” Purdue University/CME Group Want to keep up with The Spillover? Sign up to receive an email alert when new episodes are released! The Spillover is a production of the Council on Foreign Relations. The opinions expressed on the show are solely those of the hosts and guests, not of the Council, which takes no institutional positions on matters of policy.

U.S. and Israeli strikes on Iran are disrupting energy markets. Iran’s production capacity has been hit, the Strait of Hormuz has essentially been closed, and Iran’s energy-producing neighbors have been dragged into the conflict. This episode looks at the spillovers from the resulting energy price shock and explores how structural shifts, including a surge in U.S. oil production, China’s emergence as a dominant buyer, and the growth of renewables have reshaped oil’s geopolitical and economic role. Hosts: Sebastian Mallaby, Paul A. Volcker Senior Fellow for International Economics, Council on Foreign Relations (CFR) Rebecca Patterson, Senior Fellow, Council on Foreign Relations (CFR) Guest: Natasha Kaneva, Head of Global Commodities Research, J.P. Morgan Mentioned on the Episode: “Outlook for Energy Demand,” International Energy Agency (IEA) Ignacio Presno and Andrea Prestipino, “Oil Price Shocks and Inflation in a DSGE Model of the Global Economy,” Federal Reserve John Kehoe, “Iran War Oil Inflation is a Nightmare for RBA,” Financial Review Want to keep up with The Spillover? Sign up to receive an email alert when new episodes are released! The Spillover is a production of the Council on Foreign Relations. The opinions expressed on the show are solely those of the hosts and guests, not of the Council, which takes no institutional positions on matters of policy.

In a 6-3 decision, the U.S. Supreme Court struck down the government’s use of the International Emergency Economic Powers Act (IEEPA), holding that the statute does not authorize a president to impose sweeping tariffs. In this breaking news episode, host Rebecca Patterson is joined by Michael Froman, president of the Council on Foreign Relations and a former U.S. trade representative, to unpack the decision and discuss potential spillovers into financial and labor markets. Host: Rebecca Patterson, Senior Fellow, Council on Foreign Relations (CFR) Guest: Michael Froman, President, Council on Foreign Relations (CFR) Want to keep up with The Spillover? Sign up to receive an email alert when new episodes are released! The Spillover is a production of the Council on Foreign Relations. The opinions expressed on the show are solely those of the hosts and guests, not of the Council, which takes no institutional positions on matters of policy.

This episode examines the “Fragile Four” economies—the United States, the United Kingdom, Japan, and France—and why politics is increasingly spilling into financial markets. After a long stretch where markets largely shrugged off political volatility, an “age of inflation” coupled with high debt, aging demographics, rising defense spending, and anxious populations across the Fragile Four are making markets more reactive to political shocks. We break down what’s driving the shift and why cracks are appearing now. Hosts: Sebastian Mallaby, Paul A. Volcker Senior Fellow for International Economics, Council on Foreign Relations (CFR) Rebecca Patterson, Senior Fellow, Council on Foreign Relations (CFR) Mentioned on the Episode: “Accidental ‘crying horse’ toy wins hearts in China,” Reuters “Economic Anxiety Is a Global Problem,” Gallup Want to keep up with The Spillover? Sign up to receive an email alert when new episodes are released! The Spillover is a production of the Council on Foreign Relations. The opinions expressed on the show are solely those of the hosts and guests, not of the Council, which takes no institutional positions on matters of policy.