Central banks are squeezing the private economy while shielding sovereign debt - Tomorrow's Affairs
Central banks are squeezing the private economy while shielding sovereign debt - Tomorrow's Affairs
Source: Tomorrow's Affairs
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DW NOTE
The piece argues central banks have engineered a two-tier cost of capital: market rates for private borrowers, suppressed rates for governments. This isn't conspiracy — it's visible in every balance sheet. The Fed raised rates to 3.75%-4.00% while the 10-year Treasury yields 5.18%, a spread that only works because the Fed still holds $4.5 trillion in government paper it bought at zero. When sovereigns borrow at below-market rates underwritten by monetary authorities, that's not policy accommodation — it's fiscal dominance wearing a central banking mask.