Published on September 24, 2026

Weekly Strategy Perspectives: The Great Normalization

Rising government debt, persistent budget deficits, and increasing bond yields are fueling investor concerns about fiscal sustainability, with uncertain policy responses raising questions about the potential impact on markets and long-term economic growth.

Written by Carol Schleif, CFA, SASB-FSA

Weekly Strategy Perspectives: The Great Normalization

"If you would know the value of money, go and try to borrow some.”

– Benjamin Franklin

The Through Line: Mounting sovereign deficits and debt among developed economies has investors (and citizens) on edge. Unfortunately, policymakers – the only ones who can durably resolve the overspending issue – are not naturally incentivized to fix the problem. Adding to bond holders’ angst are bond yields that keep pushing higher, amplifying the cost to carry the obligations and making balanced government budgets as elusive as a donkey-elephant potluck. This week, we outline the key issues and their potential to impact (or not) asset markets and future macroeconomic prospects

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