$251 trillion. That is how much debt companies, households and governments had piled up worldwide in 2025, according to the IMF. Fortune reported on July 24, 2026 that JPMorgan now expects the cost of carrying it to climb.
In a note published the day before, JPMorgan’s Joyce Chang and her team laid out what they called the “six D’s” that will shape the global economy: deficits, deregulation, de-carbonization, de-population, de-globalization and de-dollarization. Two of the six, the analysts argued, push borrowing costs up around the world. Those are deficits and de-population.
Deficits first
The note describes “a global breakdown in fiscal discipline” and says fiscal dominance is “eclipsing monetary policy.” Global public debt, it says, has reached $100 trillion. In plain terms, governments have less room left to spend or cut taxes without worrying lenders, and the heavy borrowing is itself lifting interest rates.
Fortune noted that economists still argue over how much deficits really move rates. One theory holds that a growing national debt makes a government look less creditworthy, and that the Federal Reserve might then expand the money supply to shrink the debt’s value, which would feed inflation.
The IMF’s latest World Economic Outlook update found that governments leaned heavily on fiscal stimulus during the Iran crisis. JPMorgan wrote that the extra deficits came without “well-identified offsets,” and with “few signs of rebuilding fiscal space.”
The U.S. gets its own paragraph. A bigger debt stock, higher rates and no political will for budget consolidation “anytime soon” point to a higher term premium, the extra return lenders demand for holding long-term bonds. Yet the analysts added that the “unsustainable U.S. fiscal deficit” has not yet done much damage, because America has far more fiscal space than other countries. They called it the safest and strongest country in a time of upheaval. The risk to that view would be “any dramatic military, political, energy security, or economic setbacks.”
A smaller workforce
The second driver is demographic. Advanced economies face falling birth rates and aging populations, which means a smaller labor supply to pay for the goods and services an older, non-working population needs. Pension and healthcare bills will grow, JPMorgan notes, while demand for public investment in defense, renewable energy and infrastructure is also intensifying.
Without higher government revenue, cuts elsewhere or a change in the gap between interest rates and growth, those pressures imply a substantial rise in public debt beyond 2031, the note says.
It points to Social Security as a near-term example. The Committee for a Responsible Federal Budget’s Social Security Countdown, the point at which benefits would have to be cut, stands at seven years and 10 months. JPMorgan says neither political party is expected to act until the cliff approaches in 2032. Closing the shortfall would require roughly $600bn in new debt, and possibly more spending cuts and higher taxes.
The bank also warned that aging populations and longer lives could drive down equilibrium returns, “with even funded systems struggling.” Its verdict: “The demographic dividend that characterized the last 40 years is ending.” JPMorgan sees de-population as an underappreciated risk that will reduce savings and contribute to higher interest rates.
