Turkey and Argentina used rate pressure management to ease fiscal strain but ended up amplifying inflation and currency instability through loss of market confidence.
The former US Federal Reserve chair Janet Yellen says lowering rates to reduce debt service costs can lead to inflation getting out of control.
She compared the United States today to a banana republic.
You can’t make this stuff up…
This is coming from the former Treasury…
— Gold Telegraph ⚡ (@GoldTelegraph_) April 16, 2026
Investing.com — Former Treasury Secretary Henry Paulson urged US authorities to develop a backup plan to prevent a potential collapse in demand for Treasuries, warning such an event would have severe consequences.
Paulson said officials need an emergency plan “on the shelf, so it’s ready to go when we hit the wall,” during an interview on Bloomberg Television’s Wall Street Week with David Westin.
The former Treasury chief said a breakdown in the $31 trillion market for US government debt would differ from the financial crisis he managed two decades ago. During that crisis, the government had fiscal resources to address the credit meltdown, he said. However, in a US public debt crisis, “when you hit the wall and you’re trying to issue Treasuries and the Fed is the only buyer and the prices of the Treasuries are going down and interest rates are up, that’s a dangerous thing.”