Aug 23, 2026, 8:21 AM

I was just about to read this article. But I stumbled over the very first sentence. “… dependent on bond markets to fund spending" implies Govt spending is constrained by the willingness of bond investors to lend, chart @FT
https://www.ft.com/content/b48dd083-0cdb-4f48-8be3-c73c000e3cdf

It runs the other way for a monetarily sovereign issuer (US, UK, Japan — floating currency, debt issued in own currency, no operational solvency constraint):
CB settles Govt payments by crediting reserve accounts first; bond issuance is a subsequent, separate operation that drains the reserves the deficit just created and offers the private sector an interest-bearing substitute.